How to become a Hard Money Lender

[Joseph DiNardi-Mack]

Hello Biggerpockets,

I have a good amount of capital that I was originally looking to put into fix and flips, but the market in New Jersey has proven difficult to penetrate and I have just started a business that is taking up too much of my time, I could not run this business and manage flips. So I am looking to take the capital I would have put into flips and use it to become a hard money lender. I have done some preliminary research, but have found it hard to really find anything concrete in terms of requirements. I found that to be a HML for 1-4 family units to individual investors that a license is required in NJ but cannot find how to apply for such a license or what the requirements are. I have a pretty good knowledge base of fix and flips, and how to do due diligence. I also have a good lawyer (although he has no previous experience with HML so I would ideally like to find another) and a very qualified CPA, but again he has no experience with HML.

If there are any HMLs, especially from New Jersey, who could help by sharing some advice or even just tossing me a link to somewhere I could find more information that would be greatly appreciated. Also if you are a hard money lender in NJ who is willing to share your experiences and knowledge and would like to meet up for coffee or lunch, my treat, that would be amazing.  

Thank you all,

Joe

[Frank Y.]

Joseph DiNardi-Mack I am a private money lender in PA and I was in the same situation as you are in now. I have a full time job and I started to flip couple years ago. But now it’s more and more difficult to buy good deals so I started private money lending 2 years ago. For me, two due diligence areas need to done right - legal and financial. For legal, you need an attorney to draft all your loan documents and make sure if a license needed in your state for private lender (PA does not need as long as not to owner occupied. There are only 12 states need a license). For financial DD, you have done flips, so should know how the number works. Good luck!