"If They Can't Close in Two Weeks or Less, They're Not a Private Lender."

[Mitch Messer]

There's been some confusion about who qualifies as a private lender versus a hard money lender.

Let me make this SUPER easy.

1️⃣ Private lenders have people names, like Mary, Robert, Maxwell, or Sara.

There's only ONE decision-maker, and the person who talks to you is the SAME person who decides whether to lend you the money.

If your loan contact ever uses the phrase "underwriting committee" you're NOT dealing with a private lender.

2️⃣ Private lenders don't need a month to fund your deal. Once they say "Yes" they just need clean title and prepared loan documents.

If you're contact can't close in two weeks or less, they're NOT a private lender. (Assuming we're not talking million-dollar loans.)

3️⃣ After you close, if you never hear from your contact again, and someone else takes over, you are NOT working with a private lender.

Private lenders stay personally involved until you pay them back their money.

Because ... it's THEIR money!

Now, to be fair, I often hear GREAT things about operations like Lima One, Kiavi, and many others.

But, these are NOT private lenders. They are nationwide hard money lending operations.

#NotThatTheresAnythingWrongWithThat

#ButThereIsADifference

#TwoWeekRule

[Mitch Messer]

@Erik Estrada I don't disagree that there are lenders who pool money to work with investors, particularly for larger deals.

But, that's not the kind of arrangement that most real estate operators I talk to are seeking.

A small-time investor, looking to fund a deal for under $250K, isn't going to be very interesting to these types of lenders, anyway.

Lumping everyone together as a "private lender" is unnecessary and confusing.

If it's a private credit fund, let's call it that. But that's not private lending.

If it's a syndicated loan, let's call it that. But that's also not private lending.

If it's a major national hard-money lending operation, that's not private lending!

When one single private individual is lending their own money to an investor, I'm just proposing we call that person a private lender.

And, that person doesn't need 30 days to fund a closing.