Finding private lenders

[Christopher Huber]

So I'm working with someone to build 72 affordable houses to rent in an old trailer park that has been emptied out. Currently have 6 complete and working on the next 6. We have funding through a couple private lenders to complete 19 houses. I have tried to connect with private lenders before but have only been able to find scammers. I'm sure there are plenty of lenders on here but how do I go about finding legitimate lenders for this and future projects? Also, if you are a lender and interested in what we're doing, I would love to connect with you!

Thanks for your advice!

[Doug Smith]

As much as I hated Dodd Frank at first, I must admit that it got a lot of bad actors out of the lending business, but Private Lending to Entities (LLCs, S-Corps, etc) aren't really heavily regulated like residential lending is. I remember back in the mid-1990s I would be working through a loan with a customer and half-way through, I would get a call from them saying someone offered them a considerably "better deal" and that I was taking advantage of them. Shortly after closing, I would get a call saying they got to the closing and the other lender had bait and switched them and they would tell me "I wish I would have went with you" while the bad actor went and cashed the commission check. It really stunk. Ask for a handful of references of customers they've worked with in the past and cross reference that using www.netronline.com by going to the county clerk/recorder to pull the mortgage to ensure they actually did make that loan. Many private lenders aren't licensed, but you can ask for licensing to see if someone does it professionally or if they do it "on the side". Get referrals from other borrowers you might know. As a broker and a lender, we're always looking for smaller investors that want to be private lenders, but lack the capital, so we reach out to private lenders to try to work with them on a brokering basis. We often find, however, that they are indeed scammers. If you are working with a Private Lender and need some advices, I'm happy to give you feedback. PM me.