Private Money Lending
Gustavo J. Gomez, PhD
Halo Publishing International (2015)
Reviewed by Josh Cramer for Reader Views (10/17)
Have you ever wanted to make extra money? How would you like this to be a passive stream of money? How about to own your own business where you control what you put into it? If so, Dr. Gustavo J. Gomez would like to introduce you to this world through his book, “Private Money Lending.”
“Private Money Lending,” which actually started as his doctoral dissertation, introduces the concept of private money lending, providing a foundation for understanding investments, and the mortgage loan industry. Gomez isn’t interested here in teaching how to lend unsecured money (a loan without collateral); he is interested in showing you how to make money from investing money in mortgages. In fact, he writes that, “At the time of this book’s publishing , an investment in a private mortgage loan was generating a return ranging from 9% to 12%” (xxvii). This is an amazing return! However, ultimately, as a business owner, you must invest smartly in order to have a chance to earn such a return.
Gomez sets up his argument for investing in private mortgages well. He provides a history of investments, provides a breakdown of each type of investment, what private lending looks like, the laws surrounding the private lending industry, and even devotes a chapter to whether you should invest in private mortgages or just own the real estate itself (including formulas you can use to determine which is right for you, though the author clearly comes out on the side of private mortgage investing). Gomez is incredibly thorough through this process and documents everything you could possibly want to know about the past and current state of this billion-dollar industry (this is his dissertation after all). It is important to note as well that throughout the book, he implores the reader to be cautious and to research anyone who you would do business with.
This is a research-study-turned-textbook for learning about how to start a private mortgage lending company, with references to all of the laws and compliance information that comes with that. Thus, at times, this can be very difficult to get through. However, if this is something that you’ve thought about before and are interested in, you will have no problem getting through this text. If you are new to the world of money lending, this will be like drinking from a fire hose—there is so much information here, you will need to take notes to keep it all straight. Gomez even reminds you throughout that the learning curve is steep; however, the rewards, he says, are great, so if you can get over the learning curve, you may have the opportunity to earn money like few others can. In fact, Gomez states that the research study explored how private mortgage investing is a “less risky, more consistent, and predictable” than other investments.
Lending money can be a risky business proposition. “Private Money Lending” by Dr. Gustavo J. Gomez could be an excellent way to get started.