Need Help On Private Money Lending

[Porter Rembold]

Good afternoon BP fam! Since I became a member, I’ve been so busy. I haven’t been able to keep up and get on here to put in the time. Last year God blessed my wife and I with hitting the 25 door mark at 25 years old… Soon after that we were blessed to know we were pregnant! We had to remodel 6 units, remodel our whole house (baby safety)(low on money) and now we have had our baby girl! She is now a beautiful 11 days old and I went back to work on the job site. I now realize I need to up my game and go outside my own comfort zone in real estate investing and drive to be home more with my family. I want to implement private money and have listened to all BP podcasts 2x through. Multiple times on the private money ones. I do plan on buying a duplex here shortly from a friend as all my properties are leveraged at 80%. But after that… I need to grow!

Basically I am looking for a friend or a community to help me in getting started in my private money lending career.
Words of advice? What to do first? Do’s/Don’ts? I’m ready to expand and become a full time real estate investor and do better for my family! 
Thank you all for everything you say and do! 
God bless🙏

[Riaz Gillani]

Awesome spirit and congrats on your success at such a young age - I'm sure you worked tremendously hard to earn it.

Do's and Don'ts of Private Money Lending ... 

Do: Learn about the different loan structures (Full vs Partial Vs No Amortization, Fixed Rate vs ARMs, Prepayment Penalties, RTL vs DSCR)

Do: Speak with many different lenders - rapport and synergy is often misrepresented when looking for a lender. Of the nation wide lenders, rates don't deviate more than 25-50 basis points and at any given time a different lender can have the lowest rate in the market. If you spend your time looking for that lender you'll never get the opportunity to earn cost savings for being a repeat client. 

Do: Use an entity! That's one of the biggest benefits to switching from conventional to private money - you can stop putting debt in your name (which is especially important for young people approaching their high earning years and may want to finance a new primary home). 

Don't: Put too much stock in any promoted feature (fast closing, ease of process, best in-class service). These are all marketing / click-bait tricks. Newly originated loans take at least 3-4 weeks to close. 75% of this time is due to third party ancillary services. Document collection is also very consistent throughout the industry. So, while some Account Reps / Executives are better at what they do - they can't move mountains. 

Don't: Be scared to ask questions to your lender. Starting out can be overwhelming. Or for some people it's such a simple process they assume they understand the phraseology and happenings around them. And then they find out the loan is fully-recourse!! (they are not always, just an example) Use your lender as a resource and indulge with them when you can - they are literally your corridor to capital markets. 

Don't: Take your foot off the gas! Most Private Money Lenders do not have a borrower concentration limit (whereas the GSEs cap an individual with 10 loans) so don't ever let money or capital be a reason your success begins to level. Growth doesn't always have to be hockey-stick like ... but it can be. 

Go be great!