How To Find Real Estate Lenders.

Question

How can I locate private lenders?

I've been searching for private lenders. I had hoped to locate one by looking through houses that other investors have flipped and contacting the lender on that property, but I am having trouble locating the information on the lender on these properties.

How can the lender on a closed property be determined via reverse engineering?

Alex Breshears · Answer

Hi Taelonn!This is a really common question! There is actually book available on BiggerPockets that I co-authored with another private lender. What you may be running into is the ambiguous term hard money lenders have made of the words "private money" lender. In my world, private lender is an individual or their business entity that lends capital they directly control. We are the ones doing the processing and underwriting and we can give the stamp of approval. What you may be experiencing is Hard money lenders calling themselves private lenders. There is a movement in the space to change their title because of the negative connotation with HML and also for regulation avoidance. They will often call themselves Direct Private LEnders or Correspondent Private Lenders. Think of this as a fancy way of saying broker. Now I'm not saying they don't add value to the marketplace. They absolutely do, but they are just a very different business model and tool. FOr example, two major players in the HML space have shut their doors completely, gone out of business, because the secondary market is as thirsty as it once was for these loans or their warehouse lines of credit dry up. Private lenders, in my definition, don't have these issues because our capital is our own and we control it.Now saying all of that, I do run a large Facebook group about private lending and every friday we offer a place for active investors to post their deals they need funding for. This again isn't going to be a cure-all, because private lending in my world is a relationship based model versus a transactional one. We want to see what you are doing, learn more about your experience, who you are as a person.As far as locating the lenders, looking up in public records for the mortgage or deed of trust will tell you who the lender is at the time of closing.

Shiloh Lundahl · Answer

@Taelonn Harper It depends on the type of lender you are looking for. There is a difference between a hard money lender (which is a lot easier to find) and a private money lender (who are mostly limited to family and friends and other acquaintances). If you are looking for a hard money lender, a professional lender who has their own set of loan docs that have had lawyers go through in order to get approved for their lending business, then you can find many here on BiggerPockets. Just hover over the tab at the top that says network and then click on hard money lenders from the drop-down menu. Or you can also just google hard money lenders and the location of the property or you can go to real estate meetups and ask other investors who they use for hard money loans.If you are looking for a private money lender, a non-professional lender who does not have their own lending docs, then you will need to let people you know that you are investing in real estate and see if they have interest in the subject. If they show interest, then you can let them know that you allow people to become a part of the deal if they would like to help fund it. Then you explain they type of deal structure and profit split. Keep in mind that It is easier to attract private money lenders when you already have done several successful deals. I hope this information is helpful. Good luck investing and finding the lenders you are looking for.

Steven Foster Wilson · Answer

I have a list of lenders I can send you. I also have a private money lender I can refer you to, reach out and I will send it your way.

Mike Klarman · Answer

A true, true Private Lender that lends their own money is hard to find and what is going to make them trust you enough to lend you money? Hard Money is a good option, similar rates and terms. You'll spend months looking for "Private Money" only to find out the person you found is really a Hard Money Lender.HML can offer a great product for fix n flips. I'd be happy to talk to you about our program and the process, just shoot me a message.

Ryan O'Mara · Answer

@Taelonn Harper - a good mortgage broker can help you find multiple lender/lending options for your deals.