Why are people so secretive about their private lenders?

Question

There's an old saying that goes something like "A candle loses nothing by lighting another candle".  Why is that so hard for people to grasp?  Being a real estate newbie I've talked to plenty of people that I personally know in the business and no one seems to want to give me a lead on a private lender.  They talk about how they use OPM, however, they suggest I look into mortgages or hard money.  It feels like they'd rather me get the short end of a deal by paying extra points, fees and interest to acquire a property instead of maybe introducing or referring me to a lender that has helped them achieve their real estate goals time and time again.  At the end of the day I'm going to keep looking until I find great private lender and maybe I may have to use hard money at first, but I just want to know why people are so tight on their lenders.  Are they afraid that their lender will run out of resources? Do they not want to continue to put money in their lenders pockets to increase their lending power? Inquiring minds wanna know...

Jeremiah H. · Answer

It's very possible their private money lender doesn't have enough funds to take on multiple investors. Or maybe they feel like sharing their private money investor to a new investor could lead to disastrous results and some how end their relationship with the private money. They stand very little to gain and everything to lose in this situation, especially with a new investor.

Alex Franks · Answer

David you are correct but just because they paying cash also does not mean it is not theirs either. I was not looking for a debate. Was merely looking to help lead some one in a different path or to think out side the  box. TO be quite honest I was attending the local auction last few years. Yes I was a major player their along with about 15 folks that meet their on a normal basis. Oh and surprise it was all their funds. Hmmmm

Wow so negative but all good I rolled over the right side of the bed.

LOL Alex

Charlie Fitzgerald · Answer

And then there are other levels of private lenders that have endless capital, lower rates and lower fees and easier access to their capital than the smaller private lenders you are seeking.  Where you focus is what you find.

John Thedford · Answer

I won't give out the name of my private lenders unless they authorize me to do so. Some say yes, others have said no. Some are family members that would never lend to a stranger. Others are old time friends with a small amount of money they want to put to work and I have an established relationship with. My name gets tossed around frequently as a HML but I encourage that (I do HML out of my SOLO 401K and cannot lend to myself). I don't think they want you to pay more points or higher rates, but rather many people don't want their private information shared. There are LOTS of people wanting to lend money. Advertise on CL, ask friends, family, neighbors, attend REIA meetings, etc.

David Dachtera · Answer

@Alex Franks,

Just because they're paying "cash" does not mean it's THEIR cash, and they will likely be equally reluctant to share their financing sources.

Jeff Beard,

I hold that those who think "skin in the game" means "money" don't understand the phrase.

David J Dachtera

"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."- DJ Benedict

Jeff B. · Answer

@David Dachtera

"I hold that those who think "skin in the game" means "money" don't understand the phrase."

As in Merchant of Venice??? :giggle:

Jeff B. · Answer

My gut reaction is PML/HML loans frequently are hidden for a logical (almost said good) reason;  Banks what the buyer to have 'skin in the  game', aka no 100% financing.  As soon as PML/HML becomes visible, the whole loan process goes into the toilet.  Banks lend with the LTV concept and the buyer is expected to contribute 'personal funds', not HML money.

Alex Franks · Answer

Okay now saying that their are some good people to talk this site.

If I had advice an easier to find some local private lenders. Head to the local auctions. promise every body who is  buying is buying cash. That simple tip of the day.

Alex

Arteshia Darby · Answer

I understand your feelings @Alex Franks

Alex Franks · Answer

There are many reason but for some of us this is not a part time gig. I have built up myself over 17 years and now have a company. With that we have many lenders ,we have worked hard to build and aquire a business relationship. This is how we support our families and others.  How many big companies , want to give away their trade secrects. With that being said many ways to aquire private lenders. The projects are really what matters, along with experience in this business.

Just my two cents

PM me if I can help any answer questions

Alex

bare with spelling grammar 517 am now..

Why are people so secretive about their private lenders?

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