The Rise of Private Lending: What's Your Experience?
Member since 2024 · 75 posts · 5 votes
The Rise of Private Lending: What's Your Experience?
12 Replies
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
well have been a PML HML since the late 80s.
benefits are:
1. Speed generally
2. little more flexibility in ARV LTV
3. availability of capital.. the banks after the GFC pretty much stopped fix and flip lending Granted your top tier clients can still get these loans. However those with no to very limited experience will never get a fix and flip loan from a bank.
4. Repayment options can be more flexible like in my case I do everything on accrual this really helps flippers when they dont have to make monthly payments.
Downside:
1. Pricing higher than a bank ( if you can actually get a bank to lend you money in the first place)
2. And this is a biggee wading through the fake lenders or the Joker brokers that tell you what you want to hear but cant get the deals funded and you lose the deal and a lot of money.
3. with actual PML private people usually have very limited funds so cant scale with them.. they can have a life event and just stop doing loans all together.. Much more emotion into the deals.
- Member since 2024 · 75 posts · 5 votes2y
Quote from @Jay Hinrichs:
well have been a PML HML since the late 80s.
benefits are:
1. Speed generally
2. little more flexibility in ARV LTV
3. availability of capital.. the banks after the GFC pretty much stopped fix and flip lending Granted your top tier clients can still get these loans. However those with no to very limited experience will never get a fix and flip loan from a bank.
4. Repayment options can be more flexible like in my case I do everything on accrual this really helps flippers when they dont have to make monthly payments.
Downside:
1. Pricing higher than a bank ( if you can actually get a bank to lend you money in the first place)
2. And this is a biggee wading through the fake lenders or the Joker brokers that tell you what you want to hear but cant get the deals funded and you lose the deal and a lot of money.
3. with actual PML private people usually have very limited funds so cant scale with them.. they can have a life event and just stop doing loans all together.. Much more emotion into the deals.
Hi,
Thank you for sharing your experience and insights from being in the private money lending (PML) and hard money lending (HML) space for decades. It's clear that the evolving market, especially post-GFC have shaped your perspective, and you've outlined some valuable points about the flexibility and challenges of private lending.
The flexibility in ARV and LTV is such a huge advantage, especially for investors who might not have traditional financing options. I also completely understand the frustration of navigating through "Joker brokers" and fake lenders who promise more than they can deliver—one of the biggest challenges in the industry today.
Regarding your approach to accrual-based repayment options, that’s a huge help for flippers managing tight cash flow, and it's great that you offer that flexibility. I’d love to connect and see how we could collaborate or share knowledge further.
Would you be open to discussing how we might work together or how we can support each other in the private lending space? Feel free to send me your preferred contact details or schedule a time that works for you.
Looking forward to connect!
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Karen Smith:
Quote from @Jay Hinrichs:
well have been a PML HML since the late 80s.
benefits are:
1. Speed generally
2. little more flexibility in ARV LTV
3. availability of capital.. the banks after the GFC pretty much stopped fix and flip lending Granted your top tier clients can still get these loans. However those with no to very limited experience will never get a fix and flip loan from a bank.
4. Repayment options can be more flexible like in my case I do everything on accrual this really helps flippers when they dont have to make monthly payments.
Downside:
1. Pricing higher than a bank ( if you can actually get a bank to lend you money in the first place)
2. And this is a biggee wading through the fake lenders or the Joker brokers that tell you what you want to hear but cant get the deals funded and you lose the deal and a lot of money.
3. with actual PML private people usually have very limited funds so cant scale with them.. they can have a life event and just stop doing loans all together.. Much more emotion into the deals.
Hi,
Thank you for sharing your experience and insights from being in the private money lending (PML) and hard money lending (HML) space for decades. It's clear that the evolving market, especially post-GFC have shaped your perspective, and you've outlined some valuable points about the flexibility and challenges of private lending.
The flexibility in ARV and LTV is such a huge advantage, especially for investors who might not have traditional financing options. I also completely understand the frustration of navigating through "Joker brokers" and fake lenders who promise more than they can deliver—one of the biggest challenges in the industry today.
Regarding your approach to accrual-based repayment options, that’s a huge help for flippers managing tight cash flow, and it's great that you offer that flexibility. I’d love to connect and see how we could collaborate or share knowledge further.
Would you be open to discussing how we might work together or how we can support each other in the private lending space? Feel free to send me your preferred contact details or schedule a time that works for you.
Looking forward to connect!
U can send me a PM and we can go from there. - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
@Karen Smith
As jay mentioned private lending has been around forever and it’s really not on the rise - I think it’s always been a large player in the real estate investment space for short term loans.
Prices have increased (higher terms/rates) as the fed rate has gone up so you have seen people who could get 8 or 9% now in double digits. I think the 10-14% rate is where it will be for the next five or so years personally so plenty of opportunity
7e investments53 Reviews - Lender · Member since 2024 · 60 posts · 26 votes2y
Quote from @Karen Smith:
With more investors turning to private money lenders for faster funding, what benefits have you seen from using private financing versus traditional bank loans?
Speed, speed, speed. A reliable lender can fund a loan within days, this opens the door to countless more deals allowing you to get the best possible price. If it is a direct lender you are able to work to find more favorable terms because they usually determine their terms on a deal by deal basis. Like Jay said, there can be more flexibility in repayment options. Securing a good lender can greatly accelerate your real estate investing journey.
- Member since 2024 · 75 posts · 5 votes2y
Quote from @Jay Hinrichs:
Quote from @Karen Smith:
Quote from @Jay Hinrichs:
well have been a PML HML since the late 80s.
benefits are:
1. Speed generally
2. little more flexibility in ARV LTV
3. availability of capital.. the banks after the GFC pretty much stopped fix and flip lending Granted your top tier clients can still get these loans. However those with no to very limited experience will never get a fix and flip loan from a bank.
4. Repayment options can be more flexible like in my case I do everything on accrual this really helps flippers when they dont have to make monthly payments.
Downside:
1. Pricing higher than a bank ( if you can actually get a bank to lend you money in the first place)
2. And this is a biggee wading through the fake lenders or the Joker brokers that tell you what you want to hear but cant get the deals funded and you lose the deal and a lot of money.
3. with actual PML private people usually have very limited funds so cant scale with them.. they can have a life event and just stop doing loans all together.. Much more emotion into the deals.
Hi,
Thank you for sharing your experience and insights from being in the private money lending (PML) and hard money lending (HML) space for decades. It's clear that the evolving market, especially post-GFC have shaped your perspective, and you've outlined some valuable points about the flexibility and challenges of private lending.
The flexibility in ARV and LTV is such a huge advantage, especially for investors who might not have traditional financing options. I also completely understand the frustration of navigating through "Joker brokers" and fake lenders who promise more than they can deliver—one of the biggest challenges in the industry today.
Regarding your approach to accrual-based repayment options, that’s a huge help for flippers managing tight cash flow, and it's great that you offer that flexibility. I’d love to connect and see how we could collaborate or share knowledge further.
Would you be open to discussing how we might work together or how we can support each other in the private lending space? Feel free to send me your preferred contact details or schedule a time that works for you.
Looking forward to connect!
U can send me a PM and we can go from there.Hi,
Thank you for the response! I’ve just sent you a connection request and will follow up with a PM shortly. Looking forward to chatting and seeing how we can collaborate!
- Member since 2024 · 75 posts · 5 votes2y
Quote from @Chris Seveney:
@Karen Smith
As jay mentioned private lending has been around forever and it’s really not on the rise - I think it’s always been a large player in the real estate investment space for short term loans.
Prices have increased (higher terms/rates) as the fed rate has gone up so you have seen people who could get 8 or 9% now in double digits. I think the 10-14% rate is where it will be for the next five or so years personally so plenty of opportunity
Thanks for sharing your insights! You make a great point about private lending having a long-standing presence in the real estate investment space, especially for short-term loans. I agree that rates have naturally adjusted with the rise in the Fed rate, and it seems like the 10-14% range may become the new normal for a while.
I’m curious—what’s your outlook on how this rate range will impact new investors entering the market? Do you think it will affect the types of deals they pursue, or will the demand for flexible financing options like private lending continue to grow regardless?
Looking forward to hearing your thoughts!
- Member since 2024 · 75 posts · 5 votes2y
Quote from @Thomas McPherson:
Quote from @Karen Smith:
With more investors turning to private money lenders for faster funding, what benefits have you seen from using private financing versus traditional bank loans?
Speed, speed, speed. A reliable lender can fund a loan within days, this opens the door to countless more deals allowing you to get the best possible price. If it is a direct lender you are able to work to find more favorable terms because they usually determine their terms on a deal by deal basis. Like Jay said, there can be more flexibility in repayment options. Securing a good lender can greatly accelerate your real estate investing journey.
You’re absolutely right—speed is such a critical factor in securing deals, especially in a competitive market. The ability to get funding in just a few days can make a world of difference, allowing investors to act quickly and lock in the best opportunities.
I’m curious, in your experience, what strategies have you found most effective for building strong relationships with reliable direct lenders? Have flexible repayment terms been a game changer for your deals, and if so, how have you leveraged that flexibility to scale your investments?
- Lender · Member since 2024 · 60 posts · 26 votes2y
Quote from @Karen Smith:
Quote from @Thomas McPherson:
Quote from @Karen Smith:
With more investors turning to private money lenders for faster funding, what benefits have you seen from using private financing versus traditional bank loans?
Speed, speed, speed. A reliable lender can fund a loan within days, this opens the door to countless more deals allowing you to get the best possible price. If it is a direct lender you are able to work to find more favorable terms because they usually determine their terms on a deal by deal basis. Like Jay said, there can be more flexibility in repayment options. Securing a good lender can greatly accelerate your real estate investing journey.
You’re absolutely right—speed is such a critical factor in securing deals, especially in a competitive market. The ability to get funding in just a few days can make a world of difference, allowing investors to act quickly and lock in the best opportunities.
I’m curious, in your experience, what strategies have you found most effective for building strong relationships with reliable direct lenders? Have flexible repayment terms been a game changer for your deals, and if so, how have you leveraged that flexibility to scale your investments?
Building strong relationships with lenders is critical and the easiest way to do that is to be easy to work with. In my experience, making on-time payments and making it clear that they are the first lender I am calling to fund a project have been necessary to building a strong relationship fast. As a lender, fostering relationships has been an incredible opportunity to create a healthier local real estate market. Offering flexibility has allowed my borrowers to swing into deals they would not have been able to do previously.
- Member since 2024 · 75 posts · 5 votes2y
Quote from @Thomas McPherson:
Quote from @Karen Smith:
Quote from @Thomas McPherson:
Quote from @Karen Smith:
With more investors turning to private money lenders for faster funding, what benefits have you seen from using private financing versus traditional bank loans?
Speed, speed, speed. A reliable lender can fund a loan within days, this opens the door to countless more deals allowing you to get the best possible price. If it is a direct lender you are able to work to find more favorable terms because they usually determine their terms on a deal by deal basis. Like Jay said, there can be more flexibility in repayment options. Securing a good lender can greatly accelerate your real estate investing journey.
You’re absolutely right—speed is such a critical factor in securing deals, especially in a competitive market. The ability to get funding in just a few days can make a world of difference, allowing investors to act quickly and lock in the best opportunities.
I’m curious, in your experience, what strategies have you found most effective for building strong relationships with reliable direct lenders? Have flexible repayment terms been a game changer for your deals, and if so, how have you leveraged that flexibility to scale your investments?
Building strong relationships with lenders is critical and the easiest way to do that is to be easy to work with. In my experience, making on-time payments and making it clear that they are the first lender I am calling to fund a project have been necessary to building a strong relationship fast. As a lender, fostering relationships has been an incredible opportunity to create a healthier local real estate market. Offering flexibility has allowed my borrowers to swing into deals they would not have been able to do previously.
You’ve made a great point about the importance of being easy to work with and fostering strong relationships with lenders. It’s interesting how you mention that offering flexibility as a lender has opened up opportunities for borrowers to pursue deals they might not have otherwise been able to.
As a private money lender, I'm always looking for ways to improve my services and better support investors like yourself. If you have any upcoming deals that need funding, I’d love the opportunity to collaborate and see how we can work together to achieve mutual success.
Looking forward to hearing from you! - Lender · Member since 2024 · 60 posts · 26 votes2y
Quote from @Karen Smith:
Quote from @Thomas McPherson:
Quote from @Karen Smith:
Quote from @Thomas McPherson:
Quote from @Karen Smith:
With more investors turning to private money lenders for faster funding, what benefits have you seen from using private financing versus traditional bank loans?
Speed, speed, speed. A reliable lender can fund a loan within days, this opens the door to countless more deals allowing you to get the best possible price. If it is a direct lender you are able to work to find more favorable terms because they usually determine their terms on a deal by deal basis. Like Jay said, there can be more flexibility in repayment options. Securing a good lender can greatly accelerate your real estate investing journey.
You’re absolutely right—speed is such a critical factor in securing deals, especially in a competitive market. The ability to get funding in just a few days can make a world of difference, allowing investors to act quickly and lock in the best opportunities.
I’m curious, in your experience, what strategies have you found most effective for building strong relationships with reliable direct lenders? Have flexible repayment terms been a game changer for your deals, and if so, how have you leveraged that flexibility to scale your investments?
Building strong relationships with lenders is critical and the easiest way to do that is to be easy to work with. In my experience, making on-time payments and making it clear that they are the first lender I am calling to fund a project have been necessary to building a strong relationship fast. As a lender, fostering relationships has been an incredible opportunity to create a healthier local real estate market. Offering flexibility has allowed my borrowers to swing into deals they would not have been able to do previously.
You’ve made a great point about the importance of being easy to work with and fostering strong relationships with lenders. It’s interesting how you mention that offering flexibility as a lender has opened up opportunities for borrowers to pursue deals they might not have otherwise been able to.
As a private money lender, I'm always looking for ways to improve my services and better support investors like yourself. If you have any upcoming deals that need funding, I’d love the opportunity to collaborate and see how we can work together to achieve mutual success.
Looking forward to hearing from you!Likewise, thank you Karen!
- Member since 2024 · 17 posts · 6 votes1y
Private financing has many perks compared to traditional bank loans, especially if you're after speed and flexibility. For one, private money lenders are much quicker—I've seen deals close in just a few days, which is a lifesaver for time-sensitive projects like real estate flips or urgent business needs. Banks, on the other hand, can take weeks, if not months, to approve and fund a loan.
Another big plus is the flexibility in qualifications. Private lenders tend to focus more on the value of the asset or project rather than your credit score or financial history. That makes private financing a solid option for folks with non-traditional credit or complex financial situations that banks might shy away from.
Then there’s the tailored approach to loan terms. Private lenders often offer more creative solutions, like interest-only payments or custom timelines, which can be a game-changer if you’re working on a unique project. It’s a level of customization that’s hard to find with the rigid terms of traditional banks.
I’ve also noticed that private lenders are open to funding niche opportunities that banks might consider too risky. Think fix-and-flip properties or land development projects—things that don’t fit the cookie-cutter mold banks prefer. Add to that the fact that private financing typically involves way less bureaucracy, with reduced paperwork and fewer hoops to jump through. It just makes the whole process smoother and less stressful.
What’s your experience been like? Have you found similar advantages with private financing?
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