A Possible Private Money Lender Questionnaire!

[Nelson Mendes]

I recently found a private money lender with the potential of funding my real estate deal in which is in its early stages. I've been on this real estate investor student path for a while now facing the first time investors obstacle course but stayed in line on what was reachable for me on my journey as a student gaining as much knowledge as could in the process in order to succeed. I have a private money lender questionnaire that I was able to put together but thought it would be a great idea as a finishing touch from the great minds of the biggerpockets community to give me some input on what to add or subtract from the these questions. Please and Thank You!

50. Do you offer extended loans?

49. Can both lender and borrower protect one another on a loan agreement breech?

48. What level of experience is needed upon an approval of a loan?

47. Do I have full access to the funds at anytime during the loan agreement?

46. When the borrower is approved how long after does the borrower receive the funds?

45.Will the lender need any documents on any of the investment properties during the duration of the loan?

44. Is a LLC required for a loan?

43. How is the payment received quarterly or monthly?

42. Do I need collateral?

41. Is the loan amount received in one whole amount or in parts?

40. What is the annual loan limit?

39. What is the minimum loan amount?

38. Is the loan terms agreed within lender and borrower or by an outside entity?

37. Does lender offer borrower a business purpose loan?

36. Do I receive a tax form at the end of the year?

35. Do you offer a repayment option based on borrower’s income? If so explain.

34. When selling an investment property does the loan change in anyway or does it stay the same?

33. Do you have a minimum income requirement? If so explain.

32. What data elements are required to submit on a pre-approval application?

31. Does the lender offer borrower benefits? If so what are the eligibility requirements.

30. IS there a penalty for paying off the loan early?

29. When do I have to start making payments?

28. What are the minimum and maximum loan amounts available?

27. What is the average interest rate without a co-signer?

26. What is the average interest rate with a co-signer?

25. Will the co-signers credit score have any effect on the interest rate of the loan?

24. What additional documents are required by the co-signer?

23. Can I release the co-signer on a later date?

22. What are the co-signer requirements?

21. Are there any addition fees outside of the interest or organization fund?

20. What are the annual interest percentage rate?

19. If you offer variable interest rates and what are the potential interest rate ranges?

18. Do you offer variable interest rates? {yes/no}

17. How often are interest rates adjusted?

16. Is there a fixed interest rate option? {yes/no}

15. What is the interest rate floor?

14. What is the interest rate ceiling?

13. Is there any other additional fees? {junk}

12. What is the current interest rate?

11. What’s the interest rate cap?

10. Does the spread margin over the interest rate fluctuate?

9. Can I use a credit card as a deposit?

8. What is the credit score range options for a loan?

7. Would a payment history information have any effect on a loan?

6. What is the debt to credit limit ratio acceptance level on a loan?

5. Do you need a credit report?

4. What are the benefits of having $15,000 - $20,000 - $25,000 limits on a credit card?

3. What are the benefits of having an excellent credit score?

2. How can my credit score help?

1. Do you do credit check? 

[Brad Smith]

Hi Nelson.  You need to add a lot more questions to this list. Unless an Investor, who I know nothing about, peppers me with at least 100 questions, I tend to lose interest.

But seriously, you can simplify your search by having answers to the following  questions that the Lender will have for YOU:

1. Property Address

2. Sales Price

3. Property Type

4. If rehab needed, how much?

5. If rehab needed, ARV?

6. Your experience.  Most weight given to last 2 years.

7. Credit score--yes it matters.

8. Exit strategy---Flip or Rent?

9. Funds available for project.

Have detailed and transparent answers to the above questions and the Lender will gladly provide you answers about all available financing options, most of which are one your list.