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If you work in real estate, particularly flipping houses, then you’re probably familiar with hard money and private money lenders. In this industry, knowing how they operate and where to find them is essential. But for newcomers to the house flipping industry, finding those resources might not come easily. For example, knowing where to go to find private money lenders or how to spot good private money loans are both skills learned with time. To save some of that time for you, we’ve created a short guide to help you learn how and where to find private money lenders.
Private Money Lenders: Who Are They?
A private money lender is a non-institutional individual or company which loans out money, generally secured by a note or deed of trust. Something to remember: hard money lenders and private money lenders are typically referred to as such interchangeably. Both terms are correct, depending on the nature of your particular loan. In most cases, both private and hard money loans are for the purpose of funding a real estate transaction. Private money lenders are more often more relationship-based than a hard money lender.
How do I find private money lenders?
There are many ways to find a private money lender. To help you determine where you should look, we’ve devised three separate circles to find lenders in:
If you’re looking for a good place to get money for your investments, then private money lenders are likely your best bet. They’re similar to hard money lenders, though potentially without the high interest rates (which often range between 15% and 18%, or even higher), and can get you money fast. The key is knowing how and where to look for these real estate investors.