All Forum Posts by: Steve Balinski

 @Andre Brock that is a fair question and I hear this from beginner to more seasoned investors (like you) all the time.

I raise private money from people with self-directed IRA accounts. Instead of approaching them individually, I collaborate with custodians/administrator of SDIRA and conduct educational workshops about private money lending.

With this system, I have a constant flow of individual real private money lenders (not hard money lenders :). DM me if you have any questions..

I've got a few tips- like any other business, this is a relationship based thing. Get to real estate meetups and network with people out there doing deals. Here are a few high level thoughts for you as a beginner:

-Don't lend in second position

-Don't do deals with new investors

-Don't experiment with new strategies, even with experiences investors- ie, don't jump in to a first development project with someone just because they've flipped 20 houses. 

-Start at a title company- they will help you structure liens and deeds so that your interest is protected properly. They can help make sure your contracts reflect your equitable interest in the deal. 

-Vet contractors and builders that your clients want to work with. The trades can make or break a good deal. 

There are a billion more, but that's a start. 

Good luck!

Really enjoyed reading your post — sounds like you're being thoughtful and doing your homework, which is huge. 

I’m a private lender and broker myself, and honestly, your conservative approach (entity-only, 1st liens, solid underwriting, etc.) is exactly the kind of foundation that sets you up for long-term success. Most of the lessons you’re anticipating—like managing idle capital or balancing reputation with limited funds—are spot on.

For liquidity, I’d look into high-yield business savings or money market accounts with same-day transfer capabilities. A few online banks are great for this. As for reputation while working with a smaller capital pool, transparency helps a lot—position yourself as a relationship-based boutique lender who funds quality over quantity. That actually appeals to many investors.

When it comes to reviewing deals, here’s what’s helped me:

• Start simple: I ask for the basics upfront — purchase price, rehab budget, ARV, and timeline. I want to see how they got their numbers (comps, scope of work, etc.) to see if they've done the homework or are guessing.

• Borrower & exit plan: I pay close attention to the borrower's experience and how they plan to exit. Even if they’re newer, if they’ve got a solid contractor, agent, and some skin in the game, I’ll consider it.

• Keep it within your LTV comfort zone: I personally don't go above 65–70% of ARV. If it's a heavy rehab or a tight deal, I either pass or structure it with a smaller draw to start.

• Protect your downside: Get yourself on the insurance, confirm the entity setup, and don’t skip verifying basic things like ownership and reserves. Your instincts will get sharper with every deal you look at. 

You'll definitely learn a ton just by walking through a few deals. Trust your gut — if something feels off, it usually is. And don't rush into funding something just because the borrower’s in a hurry

Also — I highly recommend getting plugged into your local investor community. Even just one good private lender or investor in your area can be a huge resource (or even a future partner). People are often more open to teaming up than you’d expect.

@Steve Balinski  The main question is: do you have a mortgage currently? If so, that answers the question, the check will be issued to both of you, and most likely the lender will hold the funds in escrow to be disbursed when the intended work is complete.

If you don't have a mortgage, the check will come to you, but as others noted - if you don't complete the intended work, I'm sure the insurance company will drop you.

That is high but also it's a cost your borrower should be paying not you. Typically it will be 800-1200 - what state is this in? 

$2k seems high. I would expect about half of that for a straightforward note and mortgage/DOT and title review. If there is something complex about this deal, then maybe that justifies more. Also, a reasonable amount of this will be paid by your borrower in the form of fees (this is part of what those fees cover).

This is also why most lenders have minimum loan amounts. Origination costs are largely fixed - it's roughly the same cost to lend $200k vs $20k.

You also have another asset: a template and related documentation for your note that you can use again in years 2+. You shouldn't have to go back to the attorney again for a whole new note.

You should ask your attorney about servicing requirements and maybe docs on how to sell the loan, forclose on the loan and anything else you can anticipate you might have to do. Your servicer will have those docs too.