Here are the basics to get you started.
OPM. Other People’s Money.
Not money from a broker or mortgage company or hard money lender. Money from real people to fund your flips and make your investments faster, easier, and more profitable.
OPM vs Private Money
What’s the difference between private money and Other People’s Money? Aren’t they the same thing? Yes and no. They’re related, but there are a few key differences.
Private money is often called “hard money.” It involves going through a broker or a company like Hard Money Mike that lends you private money.
OPM does the same thing, but it’s strictly peer-to-peer, person-to-person. It is private money because it’s a loan outside of a bank. It’s not hard money because you’re not going through a formal company or filling out applications.
What is OPM?
OPM is simple: one person has money and needs a smart place to put it, and one person has a promising property investment but no money to put into it. They form a peer-to-peer transaction.
Both people have the chance to benefit more than they would if they went through a bank. The person with the money gets a simple investment with typically a much higher return than the banks would pay. And the person who needs the money can get it cheaper, faster, and keep it more fluid. Both can end up more profitable and successful.
Taking the OPM route may feel non-traditional from a modern perspective, but historically, it’s the way things have always gotten done. One person has something, another person needs it, so they create a deal where they both benefit.
Want More Details on Setting Up OPM?
Hard Money Mike doesn’t need to be involved with your OPM deals to offer help. We have resources to help you learn how to best set up OPM deals:
- What should closing look like?
- What are proper terms?
- What documents will you need?
We want to keep things flowing in the real estate community.