8d ago in General discussion
My First Introduction to Private Lending
When I was growing up, my parents had a few rental properties. We would often spend weekends, or evenings cleaning up after tenants, painting fences, cleaning gutters, building a new patio etc. I was interested in Real Estate and started to read some books like "Rich Dad, Poor Dad".
As I got older, I became more curious about real estate and the benefits of it. I read other classics like "Nothing Down" by Robert Allen and was able to purchase my first rental property when I was 19.
In my early 20's, I was enrolled in the Bachelor of Commerce program at the University of Calgary. As any typical poor student, I was seeking additional income while attending school and during the summer. I landed a labour job for the summer and intended to use this time (mostly cutting grass) to continue to learn as much as I could about real estate and the various ways to make money.
Since I had already experienced some of the ups and downs (mostly property management hassles, clogged toilets, lost keys, non-payment of rent etc) I was looking at ways of making money in Real Estate despite not really having any money to invest!
While I was mowing laws for the summer, I listed to a Real Estate Course that my parents had purchased in the mid 90s. Yes, that is right, cassette tapes! I listened for 4 to 6 hours per day (as much as my head could handle) and tried to absorb as much information as I possibly could. I learned about wholesaling, seller financing, tax liens, foreclosure auctions, Fix and Flips, Lease Options, Sandwich Lease options, Property Management, Creative Financing and all sorts of other topics. But one of the ones that intrigued me the most was something called Private Lending, or Private Mortgage Lending.
The idea presented was that individuals, regular every day people, could take their own capital and lend it to other people and earn between 8% and 18%+ on their money. They could literally become the "Bank", and receive monthly payments from the borrower. Most importantly, this Private Loan, was secured in 1st or 2nd position on the title! The loan was secured by the real estate!
This was a super light bulb moment for me! No more tenants to worry about, no more clogged toilets, screening tenants, painting fences etc. No homeowner calls the Royal Bank of Canada , or Bank of America when their toilet is clogged!!!
This was my first introduction the world of Private Lending. But the entire industry seemed very exclusive. Very "Hush Hush". Only the rich, incredibly smart or talented could have access to these types of opportunities. Since I did not think I had any of the above, I put that knowledge and info on the back shelf of my mind.
It would be about 5 years later that a new opportunity opened for me where I would get first hand experience with "real" people in the business.
What "Myths or Ideas" did you have or do you have about private mortgages?
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My First Introduction to Private Lending
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