655: Private Money Explained Part 4: Rates, Returns, and Protecting Investors

<p><a href="https://www.biggerpockets.com/blog/find-private-money-lenders" rel="noopener noreferrer" target="_blank"><strong>Private money lending</strong></a> has become a hot topic over the past few years. With rising equity and asset prices, <strong>more lenders have come out of the woodwork</strong>, and an equal amount of investors have sprouted up to match the need. But<strong> taking on private money isn’t a light decision</strong>, although most investors think of it that way. Doing a deal the wrong way could put your reputation in jeopardy and rack up an expensive bill you’ll need to pay back.</p><p>Before you accept (or lend) private money, there are a few things you should know. But you don’t have to go through trial and error to figure them out! Back on part four of this private money series is <strong>Amy Mahjoory</strong>, investor and private money expert. Amy goes into the nitty-gritty of private money, from debating <a href="https://www.biggerpockets.com/blog/should-you-use-debt-or-equity-on-a-private-money-deal" rel="noopener noreferrer" target="_blank"><strong>debt vs. equity</strong></a> to the risk of raising capital, protecting your investors, and the type of <a href="https://www.biggerpockets.com/blog/on-the-market-4" rel="noopener noreferrer" target="_blank"><strong>interest rates</strong></a><strong> you can charge</strong> and <strong>returns you can expect</strong>.</p><p>If you haven’t raised or lent private money before, we recommend watching the entirety of this four-part series, as it answers crucial questions that rookies can often overlook. We also follow up with some Q&amp;As from the comment section about <strong>how to pay a private money lender back</strong>, why coaching is seen as scammy, and <strong>the three documents you’ll need to do a private money deal</strong>.</p><p><strong>In This Episode We Cover:</strong></p><p><strong>Raising debt vs. equity</strong> for your real estate deal and which one comes with more risk</p><p>Building rapport with lenders and <str