{"id":1680,"date":"2010-01-04T15:45:01","date_gmt":"2010-01-04T10:15:01","guid":{"rendered":"http:\/\/www.niftylivecharts.com\/blog\/?p=1680"},"modified":"2010-01-04T15:45:01","modified_gmt":"2010-01-04T10:15:01","slug":"the-difference-between-lenders-and-investors","status":"publish","type":"post","link":"https:\/\/www.niftylivecharts.com\/blog\/the-difference-between-lenders-and-investors\/","title":{"rendered":"The Difference Between Lenders and Investors"},"content":{"rendered":"<div id=\"_mcePaste\"><strong>Who is an Investor ?<\/strong><\/div>\n<div><strong>An individual who commits money to investment products with the expectation of financial return. Generally, the primary concern of an investor is to minimize risk while maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk in the hopes of collecting higher-than-average profits.<\/strong><\/div>\n<div>An investor is concerned with maximizing the return on his equity.<\/div>\n<div><\/div>\n<div><strong>Who is a Lender ?<\/strong><\/div>\n<div><strong>A private, public or institutional entity which makes funds available to others to borrow.A lender approaches a loan as an &#8220;investment,&#8221; as well. \u00a0In fact, in the loan business we often call our lenders &#8220;investors.<\/strong>&#8221; \u00a0The property that the investor views as a growing asset the conventional lender views solely as security for the loan.<\/div>\n<div id=\"_mcePaste\">As a mortgage broker, I have the pleasure of seeing quite a number of potential loan transactions.<\/div>\n<div id=\"_mcePaste\"><\/div>\n<div id=\"_mcePaste\">It&#8217;s because there is a very basic difference in philosophy between lender and investor.<\/div>\n<div id=\"_mcePaste\">An investor is concerned with maximizing the return on his equity.<\/div>\n<div id=\"_mcePaste\">Whether through leverage, adding value by making improvements, or adding value through improving a property&#8217;s cash flow, the goal is to make as much money on the equity investment as possible.<\/div>\n<div id=\"_mcePaste\">The return he receives is commensurate with the risk he takes with his equity investmentA lender is concerned with something entirely different:<\/div>\n<div id=\"_mcePaste\">Getting paid back! \u00a0A lender approaches a loan as an &#8220;investment,&#8221; as well.<\/div>\n<div id=\"_mcePaste\">In fact, in the loan business we often call our lenders &#8220;investors.&#8221; \u00a0But these investors approach their investment from the standpoint of managing their risk in return for an acceptable rate of return:<\/div>\n<div id=\"_mcePaste\">The note rate on the loan.<\/div>\n<div id=\"_mcePaste\">The property that the investor views as a growing asset the conventional lender views solely as security for the loan.<\/div>\n<div id=\"_mcePaste\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Who is an Investor ? An individual who commits money to investment products with the expectation of financial return. Generally, the primary concern of an investor is to minimize risk while maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk in the hopes of collecting higher-than-average profits. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[4876,2367,4873,4875,4874],"class_list":{"0":"post-1680","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general","7":"tag-investing-medium","8":"tag-investment","9":"tag-investor","10":"tag-investor-vs-lender","11":"tag-lender","12":"entry"},"_links":{"self":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/1680","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/comments?post=1680"}],"version-history":[{"count":0,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/1680\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/media?parent=1680"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/categories?post=1680"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/tags?post=1680"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}