September 5, 2018

Everything You Need to Know About Private Money, with Keith Baker

Episode 20:

When Keith Baker decided to invest in real estate, he hadn’t yet developed the confidence to speak to sellers, so he bought his first investment property from his parents, just to get moving. Keith and his wife then house hacked their way through their starter home, which we slowly flipped for a nice profit. Then he decided it was time to become a landlord, which I again learned about the hard way!

Because Keith travels so much for his day job, he converted an old 401(k) into a self-directed IRA (SDIRA) and began private lending to local real estate investors to keep him in the real estate investing loop, close to the action, and to expand his network. Through private lending he bought his first rental property from a potential borrower and met his business partner, Landon. Together Keith and Landon formed Asset REI, LLC, which focuses on providing owner financing to buyers and properties that are neglected and overlooked by the too big to fail banks: thus they become the bank!

He’s had the honor to serve on the board of one of the oldest non-profit Real Estate Investing Associations in the United States: The Realty Investment Club of Houston (RICH).

What you’ll learn about in this episode:

  • Keith Baker background as a private lender who has a day job too
  • The basics of private lending: no banks
  • Why Keith only lends in Texas and what kind of things he loans money for
  • The technical details regarding how the process of lending money out, making sure the work is completed, and getting paid back works
  • The biggest benefits of private lending and how borrowers beget borrowers
  • Why Keith uses for his lending through Roth IRAs and the free trainings they provide
  • Why Keith suggests looking beyond the lending
  • Why Keith believes private lending is the best alternative investment there is
  • Some of the mistakes you can make as a private lender
  • Why ROI is the most important thing about private lending
  • Why you should never raise the interest rate on a risky deal and should instead just walk away
  • Why you as the private lender should never let the borrower get the repair money until the repairs are completed
  • Trust but verify: a key principle in private lending
  • Why private lending is a great place to put your money — as long as you know how to do it correctly
  • Why private lending is a great opportunity for everyday people to increase their wealth, and it’s the most passive real estate investment there is
  • Why private lending is the best way to invest in real estate if you don’t have a lot of time and one of the safest if you do your due diligence


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