HML vs Private lender. Which is more investor friendly?

7 Replies

is there much of a difference? how do i qualify one lender from another to make sure they arent scams?

if they advertise on any public medium then they are one in the same.. private lenders don't advertise and are those you know personally. anyone who has any sorts of advertising is a HML.

they are all investor friendly that's all they lend to.

@Devin Mann , there's definitely a significant different between the two. Generally speaking, it almost always makes more sense to go with a private money lender if you can. They'll typically be more flexible and you'll pay less for borrowing the money from them. When starting out, people oftentimes use family and friends as private lenders thereby preventing the concern for getting scammed. If you want to use a HML, I suggest going to your local REIA and asking around for HML referrals - this should help you to stick with ones that have a proven track record.

I suggest first striving to use a private money lender. To get started, take some time to read through this BP blog post.

There are a bunch of people advertising on Facebook being a private lender and I asked if they were the same as hard money and they said no ... he said they do 3-5% interest rate and will fund 80% and another guy said he’d fund 100%. But they need a security deposit of around $1500 .  

Originally posted by @Devin Mann :

There are a bunch of people advertising on Facebook being a private lender and I asked if they were the same as hard money and they said no ... he said they do 3-5% interest rate and will fund 80% and another guy said he’d fund 100%. But they need a security deposit of around $1500 .  

ie. SCAM artists! [Isn't that blatantly obvious to you, Devin? And to everyone?]...

@Brent Coombs   OH for the love of GOD  these folks who really think you can get 3 to 5% money .

I shutter to think of the millions of dollars these scammers make on facebook.. I too see the ads.

and you post on BP your looking for money and the same people hammer you..

@Devin Mann   unless its a very large commercial deal  IE in the multi millions.. there is no up front money like this..  only one's that charge it are Lendinghome and they charge 199.  and its easy to see they are real. you are being taken for a ride. and will promptly lose you 1500.00  but there are better deals out there .. some of them only charge you 500.00 for the same loan you will never get.. these are real estate versions of the Nigerian scammers.. don't tall into that trap.

Originally posted by @Devin Mann :

There are a bunch of people advertising on Facebook being a private lender and I asked if they were the same as hard money and they said no ... he said they do 3-5% interest rate and will fund 80% and another guy said he’d fund 100%. But they need a security deposit of around $1500 .  

 Sounds like a FRAUD AND SCAMMER.
Many legitmate lenders, private or HML, may not ask for advance fees with the exception of an appraisal. Most legitimate lenders will take fees at closing.

@Devin Mann to answer your question, in my experience, hard money lenders are more friendly because they are in the business of selling money and you are their customer. If the deal is good and you appear to know what you are doing, a hard money lender is likely to lend money for the deal. The money gets lent at the closing along with any fees paid at closing.  Private money lenders are usually not professional lenders and they don’t usually have their own lending documents. They tend to need to be convinced more that you can return their money along with interest.

I use hard money lenders on almost all of my property acquisitions because they are able to lend quickly and they put another set of eyes on the property which can be helpful from getting into a bad deal.

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