The latest plunge in stock market performance, largely attributed to the Trump administration’s new tariffs and an overall dip in consumer confidence, has reignited a longstanding concern for American investors: volatility. Financial strategist and real estate expert Tatiana Zagorovski explores a compelling alternative that sidesteps Wall Street’s rollercoaster—private lending.
“Americans have watched their IRAs value plummet over the past few weeks,” Zagorovski says, “For those who are about to and those who have already retired, this makes the concept of retirement financially difficult, if not impossible.”
For many, the traditional retirement path—a portfolio dominated by mutual funds and stock-based IRAs—now feels less secure. But according to Zagorovski, this doesn’t mean that the American Dream is out of reach.
“I still believe that the American Dream and our prospect of a comfortable retirement are still alive and well,” she asserts, “but our path to achieving both requires a different approach than what has worked for the past several decades.”
What is private lending and how does it work?
Unlike traditional investing models that rely heavily on market timing and emotional resilience, private lending offers what Zagorovski argues is a more stable and predictable alternative. Instead of navigating the emotional tides of stock prices, investors become lenders, providing capital directly to real estate investors.
“Private lending, also known as private money, is simply the process of lending your own capital to real estate investors, and earning your return from the interest you charge on the loan,” she explains.
These short-term loans, often just a few months to a few years, command higher interest rates than conventional mortgages, frequently entering the double digits. For the investor, that means faster returns with significantly less hands-on involvement.
However, private lending isn’t entirely passive. According to Zagorovski, “In order to minimize risk, you’ll need to have a reasonable knowledge of real estate so that you can accurately underwrite the deals you’re funding.” She advises potential lenders to develop both analytical and intuitive skills: “This is a powerful combination that leads to success in lending.”
Risk management: why private lending may be safer than it sounds
Of course, any investment carries risk—and private lending is no exception. But the structure of these deals provides a built-in safeguard: the real estate itself.
“I want to set realistic expectations here, because like any other investment, private lending does come with risks,” Zagorovski cautions. “That being said, private lending is one of the safest options because you’re lending on a property that an investor has already vetted.”
This due diligence process, known as underwriting, happens in layers. First, the real estate investor evaluates the property. Then the lender conducts their own analysis. If the borrower defaults, the lender has the legal authority to foreclose on the property—a backup plan that, while not ideal, can lead to an even greater profit in the long run.
“So in an ideal scenario,” she explains, “you’ll lend to a real estate investor, they’ll do whatever they’re going to do with the property, then refinance or sell it with traditional funding, and in that process, your principal will be repaid. Along the way, you’ve earned a healthy profit from the interest payments up to this point.”
No nest egg? No problem — here’s how to get started
One of the most common misconceptions about private lending is that it’s only accessible to the ultra wealthy. But Zagorovski dispels that myth by pointing to a surprising resource many investors already have: their IRA.
“It’s true that you need money to lend in order to become a private lender,” she acknowledges. “But that doesn’t mean you need hundreds of thousands of dollars sitting around in a savings account at your local bank.”
Instead, she encourages potential lenders to convert their existing retirement accounts into self-directed IRAs. This move, she argues, opens the door to investing in private loans rather than riding out the storm on Wall Street.
“This is especially attractive in today’s market, where most of us are already facing significant losses in the stock market with no sign of recovery in sight,” Zagorovski notes. “The compounding effect from this can be significant, potentially changing the trajectory of your retirement in a way that impacts future generations in your family.”
Finding the right investors to fund
But identifying real estate professionals to fund isn’t as simple as logging onto E*TRADE. Private lending lacks a centralized marketplace, which means finding reliable investors requires initiative and due diligence.
“If you’re not already involved in real estate investing, this can be an uphill journey in the early stages,” Zagorovski admits, “but once you’ve found a solid investor and you both enjoy working together, they will typically bring a relatively steady flow of deals to fund.”
The vetting process is thorough and requires more than just a résumé check. It begins with a meeting, either virtual or in-person, and evolves into an online background check, research into media coverage, and deep dives into social media activity.
“Dig deep here, going at least to page 10, and analyze every single entry in the search results,” she advises. “Be sure to look at the News and Images tabs in both Google and Bing.”
She even recommends scrutinizing social media posts, including comments and replies, to understand the investor’s personality, credibility, and values: “Which keywords you search will depend on what matters to you.”
Is private lending right for you?
Private lending isn’t a one-size-fits-all solution, but in today’s economic environment, it might be one of the most promising alternatives available to investors seeking stability and growth.
“Ultimately, you need to make this decision based on your expertise, risk tolerance, and time available to engage in the strategy,” Zagorovski concludes. “But if it’s a fit, private lending can be a game changer for you and future generations of your family.”
With the stock market teetering on uncertainty, private lending might just offer a smarter, more resilient path toward long-term wealth—one that’s not only less volatile but also rooted in tangible assets.