THE FLIP SIDE OF PRIVATE LENDING SENSEI GILLILAND
Who Do You Loan To?
The mechanics of making loans or partnering up is
relatively simple. The real minefield is lending on the
right properties, and to the right investors.
Those individuals that have been investing in stocks
There is no shortage of buyers and real estate
and bonds and gold may find there is no better time
investors, or other lenders who will be eager to borrow
to adjust their portfolios to include private real estate
your capital. Walk down the street with an “I sell
loans. Gold prices are up there. Fund giant Bill
money badge,” and you should find plenty of takers.
Gross has warned that we are in for negative rates
Of course few might deserve it, or will be able to
for quite a while. That means bonds and savings
handle it. They may have great marketing and
accounts costing money, rather than protecting it.
presentation materials, and the best intentions in the
Even the former CEO of Wells Fargo recently came
world. But if they don’t have what it takes to deliver
out and suggested we don’t put new money into the
then it’s highly risky.
stock market. That’s big. Real estate is about all
that’s left.
So what should you be looking for in someone to lend
your capital to?
It doesn’t get much simpler than loaning your money
to someone else; letting them do all the hard work.
• Experience
Then enjoying a share of the profits. That is if you
• Long term, big picture thinking
make good loans.
• A proven system
• A sustainable business model
• Have a strong advisory team
Of course the best borrowers or investment teams are
going to be equally selective about who they accept
capital from. I know I am. In most cases, when a bank or
credit card money sends me an offer I know it’s probably
a bad deal. I don’t need the money, and it is normally on
terms which are in their favor, and borrowing is doing
them a favor. I don’t know about you, but I don’t feel that
sympathetic with most high street banks. At least not to
the point where I feel I have to make them a profit. But I
do like helping ethical individuals, couples, and families
find a way to get ahead.