Understand that private money is from individuals who are not in the business of lending, therefore they can't advertise as that puts them in business, soliciting loans and makes them a hard money lender. Now, a private lender can be introduced to you, but sounds like Shannon is speaking of investors going through a hard money lender as a conduit, which can also put them in the business......
Think of a private lender as your grandmother, your co-worker at the office, maybe your CPA or attorney or a business owner you know, where these people loan money to you out of a personal relationship and who don't lend money to just anyone.
There are ways to get to know individuals through personal or business relationships, but the guy at your REI meeting probably isn't a private lender as he probably lends as a side line. How that relationship is made and how loans are made can make a difference.
Why does it matter? Because someone in the business of lending who fails to follow the registration requirements is then engaging in illegal lending, that might be a good thing for a borrower. They can also have issues in securing or enforcing loan terms. Usually where someone passes by things like registration requirements they are also bypassing other matters, like usury laws, collection practices, predatory lending issues. While all that may be their problem, their problems can become your problem too......
And, if you talk a true, private lender into making you a loan, be careful as to what you do to ask and how you present the deal to someone's grandma. These aspects have been posted on BP in more detail, a search should pull up more than you want to know. :)
