Lesson · Facts First
Private Money Lending
The bank earns with none of the landlord headaches - private lending lets you do the same, secured by real property.
The facts
- 01The instrument is a promissory note plus a recorded mortgage or deed of trust - the recording is what makes your loan secured rather than a promise.
- 02Underwriting basics: lend against value after repair, not purchase price; require borrower skin in the game; title insurance naming you; hazard insurance naming you as mortgagee.
- 03Usury and licensing rules are state-specific - some states cap rates or require licensing for frequent lending; check your state before you lend repeatedly (state banking/regulation statutes).
- 04Payments, default terms, and foreclosure rights live in the note and mortgage - the written terms are the deal. No terms, no security.
Sources
- State usury and mortgage-lending statutes (varies by state)
- Standard promissory note / deed of trust practice
Educational content only — not tax, legal, investment, or VA-benefits advice. Figures verified against the cited sources for 2026; confirm your own situation with a qualified professional before acting.
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