Starting a Private Money loaning business.

[Noah Swope]

Greetings,

My name is Noah, and I am interested in exploring the field of hard money lending. Unfortunately, I do not possess the personal capital required to fund loans myself. However, I have a valuable network of connections through which I can identify potential borrowers. At present, I have successfully facilitated 1 loan transaction, which I personally funded. I am now seeking guidance on how lenders typically acquire a pool of funds and whether I can adopt a similar approach.

Furthermore, as I embark on this new venture, I would greatly appreciate any recommendations or areas of focus that you may suggest for someone starting out in the field.

Thank you for your assistance and valuable time.

Sincerely, Noah S.

***I would gladly pay someone for their 1 on 1 help in getting started.***

[Jeff S.]

There are a lot of options to get into lending with little or no money, @Noah Swope.

One way is to become an affiliate of some of the larger lenders, which can easily be found through Scotsman Guide, the member directory at AAPL, or even on BP. Most will have a website link to their affiliate program. Here, you act as a commissioned salesperson and get paid for the business you bring in which closes. Depending on their criteria and your borrower’s needs, you can and should represent many companies. I suspect many of those who call themselves lenders on this board are really affiliates.

If you have enough money for even just a few loans, you can hypothecate them individually or collectively. In this case, you re-lend the money that others are willing to loan to you using your loans as collateral. You’ll earn the spread between what you’re lending at and what you’re paying your lenders. Understand that depending on your state, this might require a security exemption, which is something you should check with your attorney.

You can originate loans using white paper offered by many larger lenders. I personally find this approach deceptive since the borrower doesn’t know who their lender really is, but it’s legal in many states and seemingly widely used.

Another option is to become a broker and originate loans for other lenders.

Once you become successful and show that you know how to make money by lending money, others will ask if you accept investors. If you know enough of them, you can form a syndicated mortgage pool and lend their money, taking your profit as fees. Local real estate clubs are a good place to meet like-minded investors.

Don’t try to do everything online. If you haven’t considered it, become a member of the AAPL and attend their convention. You’ll meet many lenders, lawyers, and service providers in all shapes and sizes. There will be lots of money and creativity in the room.