How do I become a private lender?

Question

I have heard there are smaller lending groups where you can purchase a note of the loan for a private investor with fairly good return rates. I live in the Bay Area and I want to get into real estate, but there's just not a lot on the market right now and what is on the market is selling for hundreds of thousands of dollars over asking price. I am looking for connections to vetted private lending groups to learn more about my options as a smaller lender.

P.S. Any advice on how to avoid a scam in private lending is welcome! Thanks BP folks (:

P.S. Any advice on how to avoid a scam in private lending is welcome! Thanks BP folks (:

Joe Davis · Answer

Alicia, not sure if this is still something of interest to you. But we let co-investors invest partially in the notes that we originate in our market (Houston, Dallas, San Antonio). Essentially, you can get in that particular note for as little as 10% of the overall face value. It's a great way to get started in private lending - you don't have to worry about the origination, servicing etc. I am sure others are doing this too, but if there is interest let me know and we can talk.

Ray Hage · Answer

Hey Alicia, I could definitely help with that as I myself am PML and also raise money for flips (mainly in Orlando, FL area as it is still hot) as well. I'll send you a private message.@Tyler Warrick thanks for the shout out! I appreciate it

Tyler Warrick · Answer

@Ray Hage is a great resource for properties in FL. He raises private money. Might be worth reaching out to him.

Aaron Bihl · Answer

Hey @Alicia Evans,

If you're looking to buy notes, paperstac is probably the most well known place for that. I haven't bought any there but listed one of mine that we ended up holding on to.

As far as private lending, I would just make sure you are vetting the person you lend to. I have a fix and flip/wholesale company in San Antonio, TX and we use private lenders quite often.

A few things I would do before lending to anyone on any project:
1. Check references (title company, other private lenders, ask for details on past projects)
2. Make sure everything goes through a title company
3. Make sure the loan is collateralized against the property, in Texas that's a deed of trust and a promissory note, and we generally personally guarantee everything.

Let me know if you have questions on this process, glad to help however I can.

Salvador Auciello · Answer

Get a third party company to draw docs. Have appraisal done by a AMC. Do guidelines on what you will lend or won't lend

be versed on a good deal or not and charge accordingly.  Let's connect and discuss

Matthew Rolf · Answer

@Alicia Evans let me know if you ever want to private lend on flips for me down here in Texas :)

I am working toward completely eliminating using Hard Money and only doing Private money.  I would be happy to discuss if this is of any interest to you.

Craig De Borba · Answer

Following, Also interested in the same

How do I become a private lender?

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