How I stay at the top of my private lenders list!

[John Horner]

My real estate company in Columbus, Ohio borrows from private lenders frequently for both fix and flip projects as well as rental properties..  I have used the following rules to maximize my relationship with these lenders, and because of this, I'm usually the first one they call when they have extra funds to use!  We have 6-8 private lenders, but we regularly use 3-4 depending on the timing and quantity of funds.

• Present an organized and professional portfolio including your knowledge, experience, and a few of the projects you have been doing.
• Stay in constant communication - Some lenders may not want updates all the time, but if they have a good chunk of money wrapped up in your project, I would keep them in the loop as your project hits milestones.  This includes notifying them on any changes to closing schedule on the purchase or sell side, any delays you have on rehab, etc.  
  
• Get a couple deals with them under your belt before asking for an interest reduction.  If you ask for a lower interest after your first deal, they may be turned off.  I usually wait until I've done 3-5 deals with a lender before I ask for a discounted interest rate.  They understand that you are making them money, and if you can give them consistent business where their money is almost always in use, it is worth it for them to keep you happy!
• Buy them lunch, send them gift cards around the holiday's and stay in touch even if you don't have a deal for them.  Ultimately, stay in communication and keep building your business relationship as well as friendship with them.
• Be honest with them.  If you lose money on a deal, it's OK to tell them that.  Think about it, they will probably be more impressed if they know you lost money on a deal and still paid out all their interest on time!

With these few tips, your lenders should be coming back to you for more opportunities after every deal!  

Keep in mind, while they are primarily private lenders, if you stay in their good graces, their is a good chance if they see a deal or opportunity themselves, you may be the first person they share it with!