Need Help Finding Private Money or Hard Money

I am just getting started with real estate investing and have got one property under my belt here in Chicago. Everything went pretty well and I am ready for another one. I don't think I post the loan scenario because that would be soliciting, but I need some help finding a Private Lender or Hard Money lender. I have a couple exit strategies in place, taking on some equity partners on, in exchange for using their credit to do a cash out refinancere. Im trying to get the property quickly and rehab it. I got a little money to put towards any fees and earnest money, but I can't put down 5% or 10% some of the lenders have been asking for. I got a lot of equity in the property 48% ARV Equity equals 70000. Any suggestions would be much appreciated.

Dion DePaoli

Note Investor · Fort Lauderdale, Florida

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Dec 09 '11, 12:58 PM

Andrew,

You are not soliciting if you post loan terms. A lender solicits a borrower shops which includes compares. When a lender "holds themselves out to the public" to find a borrower make a loan, that is soliciting, not vice versa.

A little of your post is confusing. Why doesn't the lender you did the first deal with do the second deal with you? (they are your obvious resource)

Can you clean up some of the other deal parameters for us so we are all on the same page?

Purchase Price = "X"
Repair Cost Estimate = "X"
After Repair Value = "X"
Capital you have to put in (all inclusive) = "X"

I think you mean that in order to payoff the lender who helps you purchase the property, you have some folks who will refinance the property with you? Once you are the owner of the property, especially with significant equity, it is easier to qualify for a loan. That being said you may not get to cash out.

What is your end all strategy on the property, are you planning on keeping it with a renter or selling it?

I will keep an eye out for your update.

Bryan Silver

Real Estate Consultant · Seattle, Washington

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Dec 09 '11, 01:31 PM

Most, if not all private money/hard money lenders today will require you to put some skin (contribute cash) into the project.

My suggestion to you would be to find REHAB lenders that can fund your projects. Believe it or not, there are still some REHAB lenders out there that will fund 100% of your costs up to 60-65% of ARV/FMV.

Just use your google function.

Anthony Clayton

Commercial Real Estate Broker · Rancho Cucamonga, California

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Dec 09 '11, 02:27 PM

You can go to google and type Chicago in google maps, and then in the search nearby area type in hard money or private money.

FYI...you will need to invest at least 40% down from the purchase price. You might be able to get away with 20% down and a seller carry of 20%

Ann Bellamy

Hard Money Lender · Tyngsborough, Massachusetts

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Dec 09 '11, 03:57 PM

Andrew, hard money terms vary by location - at least if you are using a local hard money lender. If you are using one of the national companies, that's another story. But your best bet is to find a local lender.

As Dion says, post your terms, and someone here might be interested. Certainly you'll get some advice.

To find a local hard money lender, first look her on Bigger Pockets. There is a hard money directory. And, If you post your deal, they might find you.

Second, there are directories of hard money lenders, just like here on bigger pockets and although most of the lenders who post on those directories are national companies, that's not consistently the case. I don't think I can post the links here, but if you pm me, I'll send you some links.

Third, go to your local REIA (Real Estate Investors Assn) and ask for recommendations for hard money lenders. Make sure to ask about their reputation as well, it's important that you work with someone reputable.

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

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Dec 09 '11, 04:19 PM

IMHO your best best is word of mouth. Go to your REIAs and talk to people. Actual experience with lenders is the best recommendation.

Terms are all over the place. 40% down seems very high based on what I see around here. Maybe things are different in your area. There's a local lender that requires 20% of purchase and 20% of rehab down and has lower rates (12%, I think). Another lender will go up to 70% of ARV, which may be nothing down if your deal is good enough, but had higher rates.

Private money is private. Its someone you know. If its a stranger or a company, its hard money. So, talk to everyone you know and everyone you meet about what you're trying to do. You might be surprised at who might be interested in funding a deal.

Jon Holdman, Flying Phoenix LLC