Getting a Hard Money or Private Lender

[Daniel Howard]

I've been looking for a hard money lender or a private money lender, and I will be contacting some of the places that look promising to work with. Before I do that, I had a couple things I was not sure about.

When working with a hard money lender, the typical advertisements that I have seen indicate that they will determine whether to do a deal or not based on the property, meaning, I have to find the property first, then they will determine if they fund it. That leads me to believe that I should start working with an agent and start actively searching for a good deal. My only concern (having only bought a house on a conventional loan) is that sellers and agents will be hesitant to work with me without being pre-approved in some way. Do hard money lenders typically work by offering to do a loan on a specific deal? Is there anything I will need to do since I will not know whether or not I will receive funding until the deal is presented?

Being that I'm a beginner, I was curious what everyone else's experiences were like working with a hard money lender or a private lender, and what that process is like.

[David Weintraub]

Some HMLs will finance 100% but your rates and fees will be considerably higher.

You don’t need a Deal to be qualified. They look at your credit score, recent bank statements and background to see if you’re lendable. Yes, property has a lot to do with it but you can be pre-qualified.

That said, HML can agree to lend to you but also reject a property if they don’t like the area. Maybe crime ridden, too many days on market, or other factors.

There are some national lenders who will lend on almost anything which isn’t necessarily a great thing. They have a volume game.

If a HML rejects you at listen take heed as to why they did so before seeking new partner(s).