How to Become a Loan Shark – Things You Should Know

Becoming a loan shark might sound like a terrible thing to some people, but it is essentially the same thing as being a hard money lender. The only difference is the name, which many people have come to associate with negative connotations and a bad reputation. The reality is that if you are an investor, being a loan shark can actually be a great way to make a profit if you are willing to deal with the risk involved. As this type of lender, you will be dealing with distressed investments and distressed borrowers every single day.

While many people assume that these lenders prey on those who are less fortunate, it is simply a matter of investing to seek out people in distress and help them while also making a profit. You don’t necessarily want to be known as a loan shark, per se, because you can get in trouble for not following the laws of lending as they are set forth. Although there isn’t a legal definition for being a predatory lender, as most of those lenders are called today, there is an idea of this type of lender that they will carefully skirt around the laws to keep people in debt to them for as long as possible.

This might sound like a great way to make a profit, but becoming this type of lender isn’t all that it is cracked up to be. In reality, you can get involved in hard money lending to help people out and make a profit without charging excessive fees or interest or barely meeting the requirements of the law. Because you are dealing with people who are in stressful situations, there will be a much higher risk of default on the investments that you make by lending people money.

You have to be prepared for the pitfalls of being a loan shark or hard money lender, and do it to the best of your ability without taking advantage of people to an extreme degree. With a good reputation you can easily work with local lenders to get people into your office when they are denied by other lenders for the loans that they need. However, if you are known as a loan shark that takes advantage of desperate people, your investments will likely not pay off and become more troublesome than they are worth. When it comes to hard money lending, remember that you have laws to follow and a reputation to uphold.