Private Lending

Does anyone use private lenders? Can you give the pros and cons of using private lenders money versus using your own money? I’m not saying that I have the money now, but if I continue wholesaling and building up on my profits, later down the road…why would I still use private lenders money?

Also, can anyone tell me how’ve they obtained private lenders and how they approach potentical private lenders? What works best? What % of net profit do you pay the lender?


my husband is a Chiropractor and I contact some of his friends and associates to be private investors for me

I usually tell them that I will pay them 10-12% interest I do not want it to be to high for me because I want to control my cost plus make it profitable for them.

I will also pay them a 1-3 points for their money if I am only going to use their funds for days to weeks that way they are still making money with me.

They know I have been in the business and they know my experience so I do have a track record so I would recommend that you keep a folder of all your successess with before and after pictures if you rehabbed the house

Private Lenders are great if that’s your only option.

If you ever need to sell or refi the property and your private lender isn’t reporting your mortgage note to your credit report you will have some problems.

If you private lender doesn’t place the correct lien on title, you may have some problems. If your private lender decides not to give a payment report to your loan officer at the time of refi or selling, you will have problems.

Many banks are not to sure at this point just what to do with private lenders. Their documentation can be refused altogether. I’d try and do your best with going through the normal route of lending before contacting a private lender.

Can you give the pros and cons of using private lenders money versus using your own money?

Pros of using your own money
you dont’ have to prequalify
you make the rules ;D
Fast, fast, fast, you don’t have to wait for some one to make a decision

Cons of using your own money
thus limited on how many houses you can buy and for how much

Pros to Private money
some times cheaper then HML
you can negotiate fees and rate

Cons to private money
fees and points to pay

I use both my money and Private investors.

Private money will never be cheaper than Convential Financing methods, unless your private lender is a family member and will not charge you any interest.

Fact is… Hard Money lenders want to see a return in a short period of time, thus ballooning payments and inflating interest rates. Nothing wrong with this. They’re not a bank. They take a huge risk. They determine interest rate on the risk and it is usually very high.

Hard Money Lenders should be your last resort.

Laurie, we both have unlimited funds. What do you think a bank does? You think they run out of money? Shouldn’t you be building your website?

Yes, I agree with you Jason

We have access to TRILLIONS of $$$.

and it is realitively cheap when it comes to how much money an investor can make by using OPM.

As far as my web site my people are working on it ;D it should be done in a couple of days. I know ya want to see what I look like don’t ya

don’t worry I am not old and fat 8) LOL

it’s ok. I know your ONLY human.

Its ok your a only a MAN

just put the lid down


nice ;D

Any time :dance: