Are realtors likely to help new investors seek out private loans?

[Sam Bhattacharya]

I am looking to expand my rental property portfolio.  I would like to use the help of private lenders to do this.

Is it common in the industry for realtors to help you find a private lender?  Or is this something investors are expected to do themselves and bring to the table even before they begin?

[Alex Breshears]

Hi Sam! 

As a private lender (in my definition I lend out my own capital), I can say I haven't had a single referral from an agent in my area. They usually don't even know private lending exists, much less know to look for people doing it.  The ones who do are likely to keep the lender to themselves because they are also investing in the area. So I wouldn't wait for an agent to cough up a lender, especially if you want truly private capital to buy properties.

Now hard money lenders are using the term private lender now, which is both good and bad. In my world as a private lender, the experience is VERY different from a hard money lender. For example, I don't pull credit reports, I have the flexibility to do creative financing options, defer interest only payments, etc etc.  Hard money lenders have capital all the time, and this liquidity comes with strings attached. They have to lend in their certain box because the capital they are using is not their own. The source of the capital dictates what that loan and underwriting guidelines look like.

With that being said, I would suggest finding a few lenders you want to work with, either private or hard money lenders, and really understand the programs and their guidelines. Realize the rates are likely to change unless you lock something in very soon. It's just the nature of the economic cycle we are in right now. If you know the financing options you have available to you, then you will be able to analyze deals with real world numbers for financing.