Want to Get the Biggest Yield for Your Buck? Look at Private Equity Lenders

Top private equity lenders offer investors safe – and fat – yields on their investment

If you’re like most investors you’ve worked hard for your money, but you might be getting a bit sick and tired of the unpredictability and witchcraft of the stock market, the ups and downs of the precious metals market, and the just plain flakiness of other less savory investment “opportunities”. If that sounds like you, you might want to take a look at this: record yields that are being offered by private equity lenders. These are the folks who lend out money, typically to real estate investors, for rock-solid real estate deals.

Yield is the name of the game

The fact is, yield is probably a very important word to you. But as you know, historically safe investments don’t usually generate earth shattering yields. If you invest in blue-chip stocks, where there’s not a lot of movement when it comes to the actual stock price, you can’t really expect a lot of return on your investment, or much short-term yield. And yet, for most investors yield is king. It’s the whole reason you’re investing in the first place.

Safety is critical

Typically a savvy investor wants to find that rarest of deals, something that is rock-solid safe and offers a sold yield. But the real world doesn’t always give us what we want, does it. You’re looking for value, where you can buy something at a discount and watch it spit out a yield – a dividend, and meanwhile your principal is safe and sound. These kinds of situations can be hard to find, but certainly not impossible if you know where to look.

The two rules of investing

1. The most important rule of investing is “Never Lose Your Principal”. Why is that so important? Because if you do lose your principal you can never get it back. For example, if you have, let’s say $100k, and it goes down to $50k – well, to have that $50k go back to $100k, you need to get a 100% return on your money. So to go from $100k to $50k is a 50% loss, but to go from $50k back to $100k you have to have a 100% gain on your money.

2. The second most important rule of investing is “Always Refer Back to Rule #1”. So the safety of your principal is critical. Remember, it’s much easier to lose money than to make it. But what about that yield? Isn’t that what makes it all worthwhile?

Where to find both safety and yield

Get both safety and yield

As mentioned earlier, one of the best opportunities to get both safety and yield is through top private equity lenders. These guys work with real estate investors, evaluating their various projects and selecting the best to participate in. They understand local and regional real estate markets, and follow ironclad lending formulae to insure the preservation of capital and return on your investment. Turns out there is very little risk on these kinds of collateral real estate loans.

Where’s the beef?

Okay, you ask, what are we talking about for yield? The very best private lenders offer a 13% fixed return. By comparison, over the last 100 years the stock market has returned 9%, and over the last 10 years has only returned 8%. Let’s see… 8% on some flaky stock that you have to take someone’s word on, or 13% on a deal that you can actually understand. Sometimes it’s not hard to find the beef.

So there you have it. An investment opportunity that offers a solid 13% fixed return, and the safety of a collateralized, fully secured real estate loan. What more could you ask for?

About the Author

Josh Cantwell of www.StrategicRealEstateCoach.com discusses private equity lenders – both from the viewpoint of investor and borrower on his free podcast, Real Estate Investing Made Easy. Tune in, and catch back episodes here: https://itunes.apple.com/us/podcast/real-estate-investing-made/id570750792?mt=2