If you were to walk down the street stop someone and ask them, “If you could change your job would you,” what do you think their response would be? A handful would be content in the current position they are in, while another handful would say they would love to change jobs. What separates most, though, is executing their goal.
Take for example entrepreneurship, it is one of the most sought after fields people want to enter. Real estate is one of those areas that many people want to be involved in. If you were to search the major real estate companies, you would come up with agencies like RE/MAX or Century 21. For other positions, like residential hard money lenders, or contractors usually, they run smaller private companies that look for clientele in the surrounding areas.
So, how do you become a hard money lender? The first thing you want to do is expand your Rolodex of contacts. In every business, it is not always about what you know, this goes double for people that are in the real estate field. When starting your journey into lending, you want to make sure that you are making a lot of friends that are in the industry. You should look for another residential hard money lender that has at least five years’ experience. They will be able to give you the tools you need to succeed in the business.
Conferences are the best places to start your search for business contacts. Some conferences are held bi-annually, while others could be held quarterly. The best place to look for the next one in your city is to go online and search. Most of the time you would be able to find one wading through advertisements on Facebook.
Next, you have to figure out how you are going to pay for all this…
As a residential hard money lender, you need to be able to be in a position where you are able to give someone a loan if they need it. Some people use different means of loaning people money. Some people use their retirement funds or IRA investments. If you believe you are not able to take on all the responsibility on your investments, you could try being a fractionalized investor.
What this allows you to do is divide a lot of the financial burden among a few partners that have an equal stack in the investment. Having more investors allows you to take on bigger projects if you want to, and it gives you a safety net if something were to go wrong. The biggest drawback that residential hard money lenders have with fractional investing is the struggle for power at times. Instead of being able to approve something instantly, the parties involved have to sign off, as well.
If you truly believe it will come.
Once you feel like you have gathered all the information, tools and people you need in your corner the last thing you must do is take a leap into the deep end. Business, in general, is a very risky thing to take on, for real estate risk seem to compound exponentially. To be a successful lender you have to know when to back out or when you should jump on a good deal. Yes, it will be very nerve-racking at first, but how will you know if you do not get in the field?
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.