CalculateRealEstateROI

Financing

How does private money lending work?

Individual investor lends capital at 8–12% interest, often secured by deed of trust on a specific property.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

Individual investor lends capital at 8–12% interest, often secured by deed of trust on a specific property.

Expanded explanation

Faster than hard money, often cheaper, relationship-driven. Common sources: family, friends, syndication LP pool. Always document with promissory note and recorded lien.

Examples

  • Family member loans $100k at 8% interest-only for 12 months, secured by deed of trust.

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