Additional ways to find PMLs so I can bring deals to them?
As a realtor, I've found a couple deals on and off-market in the DFW, just needing a PML to close and perform with on future deals. Can anyone recommend a private lender that works with investors on their first flip? I am looking to build a long term relationship, with terms that benefit us both.
#1 All Forums Contributor
- Investor
- Virginia
Check out Scotsman guide - there are a lot of lenders there that may work with you. What it really boils down to in most instances is do you have money to put skin in the game. If the answer is yes then you are opening up a lot more doors than having no money in the game.
There are a few HMLs that will work with first timers, but it's a premium. If you want to reach PML you often need to partner with someone more experienced to begin with. Feel free to reach out, as I am local and have some conections.
Quote from @Jakerria S.:
As a realtor, I've found a couple deals on and off-market in the DFW, just needing a PML to close and perform with on future deals. Can anyone recommend a private lender that works with investors on their first flip? I am looking to build a long term relationship, with terms that benefit us both.
It is a big ask to find a lender that "benefits us both" and build a "long term relationship" when your relationship with the type of lending you're looking for is nil. I am not knocking you here, just pointing out the fact that when you go to a private/hard money lender currently, you're asking for hundreds of thousands of dollars in a recessionary environment, without any experience. You're going to have to earn the trust of your lender, and not the other way around - the days of free capital are gone.
If you want to invest institutionally, find a credible lender who is still lending and adapting to today's environment - I have heard that the largest lenders in the space (read, the lenders with the best rates and terms) have paused (read, stopped lending) for the next 60 days until they figure out where the economy is headed. I am currently working to save deals from falling apart that the largest lender are currently denying/passing on. The private/hard money lending world is going to look very different 60 days from now.
Hi, thanks for the feedback! I definitely agree. I understand the liability for the lender and the current situation with the market. I also just want to make sure I am ready to go when these deals become more prevalent, which is why I would like to start building relationships now, with who is willing to take a chance :)
Quote from @Chris Seveney:
Check out Scotsman guide - there are a lot of lenders there that may work with you. What it really boils down to in most instances is do you have money to put skin in the game. If the answer is yes then you are opening up a lot more doors than having no money in the game.
Hi, thanks for the feedback. I will check it out!
Quote from @Alicia Marks:
There are a few HMLs that will work with first timers, but it's a premium. If you want to reach PML you often need to partner with someone more experienced to begin with. Feel free to reach out, as I am local and have some conections.
Hi Alicia, thanks! I will definitely be in touch. I figured as much about the premium which is definitely not an issue. Just eager to get started, so whatever it takes :)
@Jakerria Seals
Local real estate meet ups are a great place to find private lenders. I'd steer clear of seeking them from national forums/social media groups like this as relationships are key to creating these connections and it's hard to sort through the junk/scams.
And the more you can talk intelligently about how to safeguard private capital and fund the loan securely, the more private lenders will want to work with you, especially new/novice ones with little experience lending or investing in real estate. If you can display acumen and empathy from a lender point of view, you will raise more capital! BiggerPockets Publishing releases a book on July 28th about being a private money lender. It's going to be a good source of information for active investors like yourself to learn how it's done the right way and understand what a prospective PML might want to hear from you as the investor.
I agree with @Alicia Marks that you may want to consider finding a partner with some experience. Not only would it allow you to qualify for better rates and terms but you may also be able to avoid common pitfalls by working with someone who's been around the proverbial block a few times.
Good luck!
You need to find the right lender and build a relationship with them. I work with a few that still work with first time flippers. The pricing is a little higher on the first one, but gets better with 2-3, then 4-5, and 5+ is prime pricing.
Are you planning to sell after the rehab or hold to rent out? Finding a lender for the take down and rehab is one thing, finding one for the perm financing is another. A mortgage broker can help set up both loans up front so you aren't having to scramble to get around seasoning issues and such.
If you plan to sell, then it won't matter so much... Lol.
Cheers!