Lending to investors (notes)
Can I earn by lending money to other real estate investors?
2 minute read
With notes, you lend money to an investor, usually secured by the property. They pay you interest. If they stop paying, the property is your protection.
It is more passive than flipping or being a landlord.
Know the person you are lending to. Check their track record, references and past projects. Scams are common, especially with strangers online promising high returns.
Always get it in writing: a promissory note and a recorded mortgage or deed of trust. Use a title company or attorney.
Why this matters
Lending can pay steady income, but a bad borrower or missing paperwork can wipe out your money.
What to do with this
- Only lend to people you know or can fully verify.
- Lend no more than the property could sell for in a bad market.
- Have an attorney or title company handle the documents.
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