Can anyone refer a private/hard money lender that you've been happy with?

Question

My business is growing which is creating the need for more funding.  I'm on the hunt for a private/hard money source and wanted to ask the BP community if anyone can recommend someone that you've used in the past that you were happy with. I'm doing a lot of research into the process but I haven't used a hard money lender before so I'm looking for input from those of you that have.

Nearly all of the team members in my investing business (Realtors, contractors, etc) have come to me via referrals from people I trust. I've found that this is the very best way to find high-quality people.

So the question is..... Can anyone refer a good private/hard money lender for single-family flip projects in east TN?

Thanks!

Will Barnard · Answer

I agree with both Ann and Jon, let me explain why as they had opposite opinions.
I believe RE groups/clubs is a great place to look for money, and I have found several private investors at these functions so I agree with Ann on that. I agree with Jon in that most of the money found at these events are in fact the hard money variety posing as or calling themselves private money lenders. I also agree with Jon's previous statement not to judge a book by its cover. On several occasions in the past I have talked with people at RE events that dressed and looked like they were just making ends meet, when in fact, they were likely the most well off in the room!

Ann Bellamy · Answer

Interesting.  Jon Holdman said: " IMHO, though, a REIA is the worst place to find these people. They just don't hang out at places like that."

In my area, (Southern NH and the eastern half of MA) private investors are all over the real estate groups.  There are many people who have cash but don't have the time or expertise to invest in RE.  At any gathering, if you ask how many hard money or private lenders are in the room, at least a half dozen will raise their hands.  Most are private people with enough money to fund one deal, (maybe).  Frequently, since they don't really understand the risks and what can happen when a deal goes bad, they will fund in conditions and circumstances that a hard money lender won't touch.

So once again, real estate investing and the funding that goes with it, is very local.  What is happening in Colorado is not the same as what is happening in Massachusetts.  So in my area, a REIA, or in my case, Black Diamond which is not really a REIA, is a great place to find money.

Anthony Dadlani · Answer

Michael,

We may have an interest in working with you. Will send you a private message.

Hollis G. · Answer

Thank you Jon Holdman. Appreciate the insight. :)

Jon Holdman · Answer

Hollis G. Equity Trust, for one, puts on seminars.  They're not free, but only a nominal charge to attend.  Now, they intend these for their investment customers.  So, if you go and start saying "hey, I'm looking for money, anybody have any" you might get escorted out.  But if you just start talking to people about what you do, you might find people interested in investing.  If nothing else, you'll get insight into how these IRA type investments work and that might aid you when you do bump into someone who has money in an IRA and might be interested in investing it.

David Beard · Answer

Wow!  The two in my markets run $100-125 each.

Hollis G. · Answer

Jon Holdman  you said in a previous post: "Now there are some techniques for tracking these people down. [u]Some of the self directed IRA companies put on seminars for their customers where they talk about investment opportunities. "

I have been trying to tap into that segment of potential funding sources, and my question is how does one link up with those Self Directed IRA companies to become an investment opportunity for their clients? I know obtaining that type of funding source would just propel me/company into different aspect of doing business.

Thank you in advance.

Michael Woodward · Answer

Thanks for the feedback David Beard.  I might end up pursuing that strategy but my local REIA charges a ridiculous fee ($500/yr) so I haven't joined.  I'll have to put some more thought into that.

Thanks also Will Barnard for the follow-up.

David Beard · Answer

Many RE investors that frequent REIAs not only own real estate, but also have healthy sums of money in qualified (retirement) accounts, and they prefer to make loans from those accounts, rather than purchase real estate, for a variety of good reasons.  Rehab loans work very well for these types of investors.

Knoxville seems to be one of those markets where no local lenders come up in a web search, just the referral services and national lenders.

Michael Woodward · Answer

Thanks Will Barnard, Ann Bellamy, and Jon Holdman.  I really appreciate your feedback. That gives me a lot of avenues to pursue.  BP is awesome!

Can anyone refer a private/hard money lender that you've been happy with?

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