How to Find Private Money Lenders
Updated: Jan 7, 2019
As you've learned so far in our weekly informational series on private money lending, private money loans are funded by private investors (or a fund of investors) as opposed to conventional lenders, such as banks or credit unions. Typically, these private money lenders are more concerned with a property's potential value, than your personal credit score. This obviously makes them somewhat appealing to many investors who are just beginning their journey into house-flipping and real estate rehabbing.
But if you're just starting out, you're probably wondering just where to find these groups of private lenders. The business of fix-and-flips can feel like a private club that you're stuck observing from the outside, dreaming of a way in. Below are a few ways to make those dreams a reality.
Start Speaking With Your Mentors
More than likely, you've bumped into a few friends, co-workers, or acquaintances who have sparked your interest in rehabbing real estate to resell. Unless your flipping inspiration is completely rooted in binges of HGTV's Flip or Flop (if it is, don't worry, you still have options), one of your greatest startup assets is the people you admire in real life, who are already working each day as real estate investors. These are the people you should be turning to for lending referrals, for genuine, first-hand experience. They'll be able to give you the inside scoop on which lenders require more money up front, which lenders prefer high credit scores, and which are simply the most enjoyable to partner with overall.
Do A Little Digging Online
If leaning on local mentors is out of the question, you can always turn to your trusty phone or laptop for a little bit of online research. Unfortunately, there are a variety of loan scams, such as money wiring, unsecured loans, and pretty much anyone who is requesting money from you upfront. You'll want to search for well-established companies, with a solid web-presence, and a good track record. If the company feels fishy at your first impression, trust your gut. More than likely, you're right, and that's not a risk worth taking.
Geneva Lakes Funding has paired with hundreds of real estate investors who are interested in making deals. We have many years of combined experience in the real estate industry, and are passionate about helping you with your endeavor, whether it's your first fix-and-flip, or your 15th.
Get Face to Face
There's nothing quite as valuable as having an in-person conversation. Using local networking events, such as your local REIA Group, chatting with realtors, and local lenders gives you a great understanding of the market in your area. Often real estate professionals are happy to share their insights on what the market currently looks like, which properties are worthwhile investments, and where you can find the best returns. Here at Geneva Lakes Funding, we focus on flix-and-flip, bridge, and cash out equity refinance loans in Southeastern Wisconsin & Northeastern Illinois. We're happy to meet with you in person to discuss your project!
Thanks for reading - we look forward to hearing your thoughts below!