I don’t want to be doing much work in my 60s. Hopefully, I retired in my late 40s, enjoyed my 50s, and I can build generational wealth in my 60s. That’s the plan currently.
So, we spent our 50s deleveraging our assets and converting them into REITs or other passive real estate securities. In our 60s, we want our money to do the talking for us.
Welcome back to the Real Estate Planning at Any Age series (20s, 30s, 40s, 50s). Our 60s should be a time of happiness, freedom, and grace. Every day we wake up, we should be thankful to have loved ones and wealth. Please read the companion article “Retirement Planning in Your 60s.”
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Let our money do the talking. This means we can become the bank. There are two ways a private individual can lend money to investors; hard money and private money loans. We can also prepare real estate ventures to pay for grandchildren’s college.
Hard Money Loans. You appraise hard money loans based on the investment property as a lender. Hard money loans are usually shorter than bank loans (roughly 6-36 months).
Investors seeking hard money loans are usually doing some sort of “fix and flip” or “fix and rent.”
The book “Buy, Rehab, Rent, Refinance, Repeat” gives us the lowdown on how flippers work.
The book has sections on working with real estate agents, lenders, general contractors, and property managers. Of course, in this scenario, you would be the lender.
Being a good hard money lender is evaluating properties and learning to spot good deals. Your name is also on the deed when an investor buys the property. So if they default, you take over the property.
Thus, you must understand a good deal and have a plan to finish the project (or sell) if things go awry. Why is hard money lending necessary in your 60s?
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Hopefully, in your 60s, you have excess cash flow. You should have various stock portfolios, rental properties, royalties, and businesses. You should have more than enough money coming in every month if you are doing it right.
In one of his books, Robert Kiyosaki says that having too much money is a problem—the opposite of not having enough money. I believe the book was “Rich Dad’s Guide to Investing.” We always want to keep our cash moving into investments—we call this the velocity of money.
Hard money lending helps us keep large patches of money flowing into investments. More importantly, someone else is doing all the research and development.
So, we may have $300,000 sitting in our accounts. We don’t want to put it all into the stock markets or USDC so that we can lend it to a real estate investor.
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Thus, we can earn 8-15% on our hard money loan, and we can also form strong relationships with the investors. That way, they can keep finding new deals and keeping our money flowing.
Or we could structure the deal to retain some equity in the rehab rental. I wrote an article called “Debt vs. Equity,” as you must understand what these terms mean in real estate.
If we keep some equity of the rental, the investor doesn’t pay back the loan. However, we receive a portion of the rent every month. And if they sell the property, we keep a part of the profits from the sale.
As a hard money lender, you can grow a lot of money. The kicker is that it doesn’t require much time. You can review deals and sign the loan paperwork. This is an ideal position to be in during your 60s.
Private money loans. Private money loans are similar to hard money. The main difference is that you base the loan on a strong relationship with the investor.
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Private money loans are typical to family members and the highest echelon of friends. So if your son or daughter was looking to start in real estate, you could be their private money lender.
Because the individual may not be as real estate savvy as an investor, reviewing deals may require more of your time. However, you will have more of a personal connection with the individual.
Think of private money loans as a passion project and a way to stay active with family and close friends. You probably won’t charge them as much as hard money loans, but they may be more rewarding to your situation.
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I would look to give my kids, nieces, and nephews private money loans. Real estate investing is tough and getting more challenging to start every day. If I can assist a family member, I want to as long as they listen and work hard.
Pay for college with real estate. Our children should be looking to have kids around our 60s. College is expensive, and we need to think of alternative ways to outperform a 529 saving account.
Now may be an ideal time to invest in real estate that we plan to harvest for our grandkids’ college. I wrote the Pay for College with Real Estate (101, 102, 103, 104, 105) series to document various ways to leverage real estate.
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What better way to build generational wealth than ensure our grandkids don’t need to worry about paying for college. Plus, depending on how we decide to fund college, they may be able to inhabit the home we bought for them.
Conclusion. Our 60s offer us ample time to participate in passion projects and family businesses. We may be too old to run rental properties and search for deals, but we can fund young people with the energy and drive to succeed.
I envision myself living overseas or on my homestead in my 60s. I can use my money to assist other motivated individuals in building their empires. As they grow, my cash continues to grow with them.
It’ll be even better if these investors are my kids or grandkids. However, we need excess capital to put ourselves in a position to become a private money lender, hard money lender, or invest in real estate for college.
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Building a portfolio of royalties, automated businesses, cryptocurrencies, dividends, and rental properties that generate excess capital is critical.
Most people in their 60s struggle, living paycheck-to-paycheck, on a fixed income like social security—they failed to leverage their youth to build wealth generators.
If you are behind as an investor, it’s okay. Go back and read “Real Estate Investing in Your 20s.” More importantly, read the article with your children to help them get ahead.
Many of us missed our chance to invest in real estate long-term, so we are trying to gain momentum late in life. Stay motivated, read real estate books, and integrate your entire family.
The best time to invest in real estate was ten years ago. The next best time is today. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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