In the world of investments you have a wide spectrum of choices to make. On one end of the spectrum are the high return and high risk investments such as stocks, mutual funds and commodities. On the other end are the low return safe investments. Such investments as savings accounts and certificate of deposits would be considered low return and low risk investments.
Ideally we would like our investments to have high returns with low risk but we do not have that option available to us. If we want one thing such as high return we have to give up another thing like safety. However there is one little known investment that can give you the best of both worlds without sacrificing either returns or safety. That investment is private mortgage lending.
What is private mortgage lending? Private mortgage lending is similar to a bank mortgage loan except that in private mortgage lending an individual is making the loan instead of an institution. Instead of the bank profiting from the loan, the individual making the loan can earn superior returns without giving up the safety of their investment.
Private mortgage lending beats the returns of traditional investments such as stocks and certificates of deposits easily. In private mortgage lending you can expect double digit returns between 10-16% based upon criteria which you set. The return you get on stocks can vary widely and you may lose much of your principal or all of it. Savings accounts and certificate of deposits will only earn you 2-3% and that may not even keep up with the rate of inflation in many years. The returns on many investments such as stocks or mutual funds are unknown but you can count on getting the return you expect when you make a private mortgage investment.
The best thing about private mortgage lending is that the high returns do not come at the expense of safety. Your investment is secured by collateral, the actual property. Typically you will not loan more that 65% of the value of the property. For example if the property you are lending on is valued at $100,000 you will only loan the buyer $65,000. Even if the property were to decline in value by 20% to $80,000 you still have more than adequate collateral to secure your investment. If the value of your stocks decline by 20% your only option is to sell at a loss or hold on to the stock for however long it takes to recover. That may take many years and you may only break even on your investment at best. In private mortgage lending you have control over the risks and protection of your investment that you do not have with any other traditional investment.
Private mortgage lending is an ideal alternative for money currently in IRAs, certificate of deposits, or savings account that are earning a very low rate of return. If you could find an investment that routinely produce double digit returns without any more risk than traditional investments such as stocks or mutual funds, would you place your money in that investment vehicle? Anyone would if they knew of such an investment. Fortunately one does exist and it is called private mortgage lending. By investing in private mortgage lending you could substantially increase your cash flow as well as your net worth by the time you retire. Private mortgage lending almost sounds too good to be true but many people are earning impressive returns by “being the bank” and taking control of their investments.
