9Hard Money Loans—Earn Double-digit Returns Helping Other Investors
A rental can have a place in every property investor's portfolio, but it's only one way to generate cash flow from real estate overseas. Another less-common strategy that you may never have heard of is referred to as a hard money loan. We're not talking about becoming a loan shark, but you can earn double-digit returns lending money to a property developer or even a fellow investor overseas. These hard money loan opportunities come in various forms. The typical borrower is a developer looking to fast-track a project, an individual looking for financing for a property purchase in a market where it isn't available otherwise, or a company funding individual renovation projects.
This kind of one-to-one lending takes place in the United States, too, where people borrow to buy a run-down property, fix it up, and flip it. Maybe they have the capital or bank financing available for the property purchase but need cash to cover the renovation costs. An individual or an organized private group lends to the renovator at an interest rate much higher than the going rate for a bank mortgage. The borrower accepts the terms because he doesn't intend on accruing interest long. The plan is to flip the property and pay off all debt as soon as possible after the renovation has been completed.
The borrower is able to fund his or her project quicker and more easily than if they had to battle bank bureaucracy, and the property serves ...
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