If you’re interested in passive income through private money lending, or simply want a way to turn around a failed AirBNB/Vacation Rental, this episode is for you!
Derek Dombeck shares tips on how to start private lending for profit, what common mistakes to avoid, and how to underwrite deals in a recession. You’ll hear his private money script for finding private vendors from his pool of past clients and why Probate is a great space to find people with money to invent. Lastly, Derek and Chad discuss 2023 housing market trends and how there is huge opportunity in failed BRRRRs and AirBNB short-term rentals through pad-split and residential assisted living. Tune in and sharpen your eye for the opportunity in the changing real estate market.
Table of Contents:
- Podcast and YouTube Streams
- How did you become a private money lender? (Success Story)
- How to find private lenders near you (Private Lender Scripts)
- How to raise money from dead real estate leads (Real Estate Prospecting)
- How to lend private money for profit with mortgage notes and small balance loans (Passive Income Private Lending)
- Alternative places to find private money lenders as banks tighten (Private Money Script)
- How to save failing BRRRRs and AirBNBs and get 3x market rate (PadSplit Investing)
- Tips for new real estate wholesalers in 2023 (Real Estate Wholesaling)
- Learn more about making money as a private lender (Links & Resources)
Podcast and YouTube Streams: Passive Income through Private Lending
Derek Dombeck went from construction worker to owning a private lending business, and now mentors hundreds of others who aspire to become private lenders while avoiding common mistakes.
As we enter an economic landscape where people start to have doubts about their fix and flips, BRRRR method investments, and short-term rentals, and as people are looking for new places to raise money and make money… There’s no better time to hear this conversation between Chad Corbett and Derek Dombeck.
Listen to the podcast or watch the video below.
You can also access the full episode 97 transcript here
How did you become a private money lender?
If you’re looking to become a private money lender, there are a few things you’ll need to do. First, you’ll need to find potential borrowers who are in need of funding. You can find these borrowers by searching online, reaching out to your sphere of influence, or by contacting local businesses directly. Once you’ve found potential borrowers, you’ll need to determine how much money you’re willing to lend them and what interest rate you’ll charge. You’ll also need to create loan agreements that outline the terms of your loans. Once you’ve established yourself as a private money lender, you can start loaning money to borrowers and earning a return on your investment.
Watch Derek Dombeck and Chad Corbett discuss the beginnings of Derek’s private lending business.
How to find private lenders near you (Private Lender Scripts)
If you’re looking for private lenders, the best place to start is by asking your local financial institution. They may be able to refer you to a few private lenders in your area. You can also check online directories such as the American Association of Private Lenders. These directories list private lenders by state and city.
Once you’ve compiled a list of potential private lenders, you’ll need to do your homework to find the best fit. Start by reading reviews and testimonials from previous borrowers. This will give you a good idea of the lender’s reputation. You should also compare interest rates and terms to find the best deal.
Here’s a quick list of places to find private money lenders.
- American Association of Private Lenders
- Credit unions
- Family and friends
- Previous clients
- P2P lending platforms
- Social media
- Word of mouth
- Crowdfunding platforms
Hear Derek and Chad’s tips for finding private money lenders and an easy script for prospecting.
How to raise money from dead real estate leads (Real Estate Prospecting)
If you’re like most real estate investors, you know that generating leads is essential to your success. But what do you do when all of your leads seem to be dead ends?
One option is to try raising money from dead real estate leads. This can be a great way to get the funding you need to pursue new opportunities, as well as to keep your business afloat during tough times.
Watch this segment for tips on raising capital for real estate deals through dead real estate leads.
How to lend private money for profit with mortgage notes and small balance loans (P2P Lending)
As a real estate investor, you’re always looking for ways to increase your profits. One way to do this is by lending private money for profit.
There are a number of ways to lend private money, but two of the most popular options are through mortgage notes and small balance loans.
Mortgage notes are created when a borrower takes out a loan to purchase a property. The lender then sells the note to an investor.
Small balance loans are typically made by private lenders to borrowers who are unable to qualify for traditional financing. These loans are often used to finance fix-and-flip projects.
Lending private money can be a great way to earn a higher return on your investment. However, it’s important to understand the risks involved before you get started.
Here are a few tips on how to lend private money for profit:
Alternative places to find private money lenders as banks tighten (Private Money Script)
If you’re a real estate investor, then you know that private money lenders are an essential part of your business. Without them, it would be much harder to get the funding you need to pursue new opportunities.
Unfortunately, banks have been tightening their lending standards in recent years, making it harder for real estate investors to get the financing they need.
Fortunately, there are a number of alternative places to find private money lenders. Here are a few of the most popular options:
1. High-net-worth individuals.
There are a number of high-net-worth individuals who are looking to invest their money in real estate. These individuals typically have a lot of money to invest and are more likely to be willing to take on a higher-risk investment.
2. Probate and inheritance leads.
When someone dies, their assets are typically distributed through probate court. This process can take months or even years to complete. However, during this time, the deceased person’s heirs may be interested in selling their inherited property.
3. Private equity firms.
Private equity firms are investment firms that raise money from a number of sources, including high-net-worth individuals, pension funds, and insurance companies. These firms typically invest in a variety of businesses, including real estate.
If you’re having trouble finding private money lenders, then consider exploring one of these alternative options. With a little bit of effort, you should be able to find the funding you need to pursue your investments.
See more: Building an Investor List
Check out this clip for tips on the best private money lending sources in 2023
How to save failing BRRRRs and AirBNBs and get 3x market rate (Investing Padsplit)
BRRRRs and AirBNBs can be great sources of income. But what happens when they start to fail?
The good news is that there are still ways to save them. One way is to invest in Padsplit, which is a platform that helps investors manage their rental properties.
Another way to save failing BRRRRs and AirBNBs is to invest in residential assisted living facilities. These are like small nursing homes that provide care for seniors. They’re a growing trend, and they can be very profitable.
Both of these options can help you get rent at a 3x market rate or more.
If you or someone you know are faced with a failed AirBNB or short-term rental investment, check out this clip for top solutions in the 2023 housing market.
Tips for new real estate wholesalers in 2023 (Real Estate Wholesaling)
Wholesaling is a great way to raise capital without buying or selling real estate on paper. Don’t be intimidated by falling prices and a changing housing market. There are still many places to find good deals and capable end-buyers; the key is understanding where to find motivated sellers in a declining housing market, and what target end-use can create enough spread for a deal.
Check out this segment to hear Derek and Chad’s advice for real estate wholesaling in 2023.
Connect with Derek Dombeck
If you’re interested in passive income through private lending, or turning failed AirBNBs into successful investments, don’t be discouraged by the current state of the housing market. While prices are falling, there are still deals, buyers, and capital to be found. You just need to know where to look.
Connect with Derek to request a copy of his free private lending book
Join our free Mastermind Group!
Get our free guide for connecting target investments with the right investors:
See More: Turning a single residential property into space for dry camping rentals.