Reading Time: 12 Min
Our guest poster Elizabeth Martin introduces the concept of real estate private lending – an investment asset that has been yielding her 9-12% returns – and breaks down how it works and how one might get started.
I am continually impressed by the smart readers that have joined the Money Habit community. Today, I’m featuring a guest post from one such reader, Elizabeth Martin (pseudonym), who is a multi-millionaire retiree who has built a strong portfolio in real estate private lending to support her and her husband in retirement. This portfolio yields 9-12% returns and provides consistent cash flow, a critical feature in every retiree’s plan.
This is an idea I had heard about and was hoping to learn more about myself for our own portfolio. Elizabeth breaks down exactly how real estate private lending works, what it pays, and how to get started if you are interested. I’ll let her take it away.
My husband and I retired from techie jobs in San Francisco in October 2016 with a nest egg of just north of $6M. We accumulated that sum largely through real estate investments made over the previous 18 years, and now we travel around the country with our beloved dog staying in Airbnbs wherever the mood strikes us. We are not interested in living frugally, so my carefully crafted budget spreadsheet showed us needing approximately 5% return from our savings to be able to live off the income generated from our portfolio.
I spent the last quarter of 2016 and the first half of 2017 transitioning to income producing assets to achieve a