How Can I Become a Private Mortgage Lender?

Private mortgage investing is something you can do. I have a number of borrowers who, in time, have become some of my lenders so it is possible for you to join this brave new world.

The Mind Of A Private Mortgage Lender 

When switching your mindset from being a borrower to a lender you will quickly find out those who can’t make the change with you. 

You grew up with Dina and are now neighbors with similar lives on the surface. Over dinner you share your financial values and find that although your families both enjoy an adequate quality of life, Dina wants nothing more for her family. 

When you come across an opportunity to further your family’s financial status she is the first one to warn you of the friend who did that back in 1982 and failed miserably.

‘Dina Do Little’ wants nothing more than for you to do less (and certainly not succeed higher than her). 

To Lend Or Not To Lend

Self doubt can be paralyzing. It can cause a great opportunity to move through your field of vision and over the horizon before you even notice.

The most effective weapon my new lenders have found to combat this is to become educated on the subject and then confidently test the waters.

The How To’s Of Private Mortgage Lending

  1. No license required – It is important to know that as long as you are a Canadian citizen you can lend into private mortgages. You do not need a special license or have to take any course to become qualified.
  2. Minimum capital requirements – Although there isn’t actually any limit to how much or how little you need to be able to lend into private mortgages; there are best practices. Typically 50K will enable you to start considering investment opportunities. You can invest with liquid capital or with your RRSPs. 
  3. Risk tolerance – Every investment inherently bears a risk. Private mortgage investments are no different. Working with a Mortgage Brokerage you should be required to fill out a form that will ask you all about your risk appetite, net worth, and liquidity requirements in order to determine the right mortgage for you to invest in if at all.
  4. Onboarding process – You will need to be registered as a private mortgage lender with the brokerage who is providing you with investment opportunities. This protects you from fraudulent activity from an individual mortgage agent.

When the time has come to pluck up your courage and embark on your maiden voyage; you can take heart in what has given my other investors confidence to leave the shore. 

Private Mortgage Lender Experience

The two levels of confidence/belief of every private mortgage investor is:

  1. Receiving the first payment – So you have closed that first private mortgage and a month has transpired. You go to cash your cheque at the bank and it shows the funds deposited. This is working!
  2. Receiving your capital back – The mortgage you lent out a year ago has refinanced and you are getting paid back. The original amount, in full, lands in your bank account. THIS REALLY WORKS! 

Find out more about all of things you need to know about your Private Mortgage Made Easy

Succeeding At Private Mortgages

Now we do need to come back to shore now as we still haven’t done any of this in reality. ‘Dina Do Little’ is still yakking at the fence about her great Aunt ‘so and so’ and her failure.

But what is really at stake here? I think in time we all become like Dina if we do little and less. We find excuses to not try something or take a risk. And that is the worst fate of all.

Private mortgage investment is a secret investing tool that surprisingly few people take advantage of. You can take the time to explore this avenue and get all of your questions answered.

So many of my investors have taken voyages to new opportunities and when they speak to the ‘Dina’s’ of their life they just smile and know inside that they have become somebody different. Someone who makes their own way in the world. Let’s take the first step together.