Investor · Albany, GA · Member since 2014 · 70 posts · 8 votes
Hi everyone, I am interested in working with private money lenders but I see that many of the sites out there are scams. Is there a serious, reliable source for PM lenders available? (not hard money) ....Thanks in advance, (PS I hope this isn't supposed to be in the marketplace)
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
11y
Private money -> someone you know personally.
Hard money -> someone who advertises and responds to ads.
The difference? Hard money lenders (who do often get their money from private individuals) know what their money is worth. Private money lenders may have some idea, but will generally be satisfied with a lower rate than a hard money lender.
In a sense, the relationship is the same as for buying a car. You can a used car from an individual for less than you will pay for the exact same used car at a dealership. The key difference from your perspective is the same, too. With a dealer you go to the lot, look at their inventory, and close the deal right there. With a private transaction, you spend weeks searching craigslist, drive all over town looking at cars, and then handle all the paperwork and money yourself.
Real Estate Broker · Provo, UT · Member since 2013 · 689 posts · 511 votes
11y
There's very little difference and a lot of similarities between the 2, and they can switch back and forth between private and hard depending on the deal.
Is there a reason you're leaning towards private vs. hard?
Investor · Albany, GA · Member since 2014 · 70 posts · 8 votes
11y
@Dave Fontana: Thanks Dave!
Blair, Mainly because I'm under the impression hard money is at higher rates for much shorter terms. Is this the case? If they are basically the same thing, I wasn't aware of this. Also the hard money sites I've visited seemed to be more companies rather than individual lenders one can build relationships with. Do I have this wrong too?
Wolcott, CT · Member since 2013 · 139 posts · 49 votes
11y
@cltumlin Private Lenders tend to be those you already have relationships with, seeing how private lenders are just people with interest in investing in you and your real estate ventures.
Start with family, friends, co-workers, or anyone in your circle or connected to your circle. There is always more money around us than we think!
Investor · Cortlandt Manor, NY · Member since 2015 · 63 posts · 10 votes
11y
they call it private money because its a private relationship between you and that person lending you the money. I've found some luck going through private money only because friends of friends have deep pockets and want to get into investing my advice is find a deal or possible deal run some numbers and join your local rea group and they can guide you to better fit your needs
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
11y
Private money -> someone you know personally.
Hard money -> someone who advertises and responds to ads.
The difference? Hard money lenders (who do often get their money from private individuals) know what their money is worth. Private money lenders may have some idea, but will generally be satisfied with a lower rate than a hard money lender.
In a sense, the relationship is the same as for buying a car. You can a used car from an individual for less than you will pay for the exact same used car at a dealership. The key difference from your perspective is the same, too. With a dealer you go to the lot, look at their inventory, and close the deal right there. With a private transaction, you spend weeks searching craigslist, drive all over town looking at cars, and then handle all the paperwork and money yourself.