You can find a lot of information online about hard money loans. It's safe to assume most investors have heard of it. There are many names for it, such as Trust Deed Investing and Being the Bank. While penny stocks and junk bonds offer high yields, smart investors don't rush to grab them. It must be something else that makes hard money loans appealing.
Security is the most important aspect of hard money loan investments. Your investment will be backed by, secured by, linked to, or kept safe by valuable collateral. A secured loan from a San Diego hard money lender is often referred to as having a plan B.
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Your investment in a secured loan is a wager that the borrower will make monthly payments and eventually return your principal. You agree to receive a specific return in exchange for your right to use your money for a certain period. Your Plan B is the real estate which is secured by the loan.
You have the right of liquidating their assets to repay yourself. This type of investment structure is rare. Protecting yourself is the most important aspect to any hard money loan investment. You don't own the company if you purchase a share of stock.
You buy the right to receive cash flows on terms set by another person when you purchase a corporate bond. You have the right to make the rules and call the shots when you invest in hard cash loans. You have the right to evaluate the situation and to create loan terms that minimize your risk.