How to approach a private lender

Question

Hey guys, I'm new to real estate investing and was hoping for advice on how to approach a private lender. I'd like to have all relevant information in a folder I can walk them through, but am struggling on what all should be in there. Just looking for some thoughts or maybe even a template that has worked well for one of you.
Thanks in advance.

Kyle Mccaw · Answer

@Marcus Powell

I started out using hard money loans. Once I had a few successful projects under my belt, people in my network started asking how they could get involved — that’s when I started introducing the idea of private lending.

When I pitch a deal now, I keep it simple but professional. Here’s what I include in my lender packet:

• Deal overview – address, photos, ARV, comps
• Purchase & rehab budget – detailed scope of work, timelines
• Exit strategy – flip, refinance, or rental (with estimated profit or cash flow)
• Security – how their loan will be protected (typically a promissory note + deed of trust)
• Track record – short summary of past deals or team experience
• Terms – what I’m offering (interest rate, length of loan, points, payment terms)

Deal overview – address, photos, ARV, comps

Purchase & rehab budget – detailed scope of work, timelines

Exit strategy – flip, refinance, or rental (with estimated profit or cash flow)

Security – how their loan will be protected (typically a promissory note + deed of trust)

Track record – short summary of past deals or team experience

Terms – what I’m offering (interest rate, length of loan, points, payment terms)

The key is transparency and communication. Private lenders aren’t banks — they’re investing in you as much as the deal. Show them you’ve thought through the risks and have a plan for everything.

Just locked in a private money loan last week for a flip I’m closing Friday — so it definitely works.

Mike Grudzien · Answer

Marcus,Kyle did a great job answering the question!

Marcus Powell · Answer

@Kyle Mccaw This is awesome! I would not of thought to incorporate my exit strategy. Seeing it laid out like this makes it seem less daunting. Thanks and congrats on the upcoming deal.

Marcus Powell · Answer

@Chris Seveney Thank you. This would be my first deal and I think I'm over analyzing everything and making it more complicated than needed.

Chris Seveney · Answer

Hey, congrats on taking the first step — working with private lenders can be a great way to build your real estate business. I remember putting together my first lender packet and wondering the same thing.

What works (for both parties) was to focus on clarity and credibility. I’d suggest including:

• A short summary of who you are, your background, and why you’re getting into real estate
• The investment opportunity or your overall strategy (e.g. BRRRR, flips, buy and hold)
• A sample deal analysis — even if it’s hypothetical — showing purchase price, rehab budget, ARV, and how the lender gets paid back
• A rough timeline and how their capital is protected (e.g. lien position, insurance, title, etc.)
• References, contractor info, or anything else that builds trust

A short summary of who you are, your background, and why you’re getting into real estate

The investment opportunity or your overall strategy (e.g. BRRRR, flips, buy and hold)

A sample deal analysis — even if it’s hypothetical — showing purchase price, rehab budget, ARV, and how the lender gets paid back

A rough timeline and how their capital is protected (e.g. lien position, insurance, title, etc.)

References, contractor info, or anything else that builds trust

You don’t need to overcomplicate it — think of it more like a conversation guide than a pitch deck. Just be honest, show you’ve thought through the details, and be upfront about risks and how you plan to handle them. If you have not done a deal, then you want to show them how you are going to protect their investment and work with legit contractors etc.

Marcus Powell · Answer

@Joyce Ann Magallanes thank you so much for walking me through the process. I am going to approch my great uncle (who has been a lender to others in the past) to see if he is still interested in lending and I was hoping to present as professional a packet as I could. But it is great to know that there are people here willing to help give guidance and even step in if needed.

Joyce Ann Magallanes · Answer

Hi, Marcus!

What is your goal in working with a private lender—are you seeking gap funding or a first-position loan?

We’d be happy to have a quick conversation to better understand your needs. Based on your financials, we can issue a proof of funds so you can begin identifying potential properties. Once you find one that interests you, let us know.

If the deal is a fit for both sides, we’ll provide a term sheet. If the terms work for you, we’ll move forward with ordering the appraisal. Assuming the appraisal comes in well, we can proceed to closing.

Let me know a good time to connect!

Marcus Powell · Answer

@Mike Klarman Thank you so much. Seeing that you had contact with your lender for 12 months to get to know each other puts this a little more in perspective for me. My potential lender is a distant family member but I've clearly not been doing all that I can since I've not made it know to him that I've begun real estate investing.

Mike Klarman · Answer

Good question.  I just had a meeting with a private lender this past weekend.  A young man I actually met on BP who wanted to get into the lending side of this industry.  For the last 12 months we exchanged phone calls, texts, emails, and met in person 3x.  In that time I kept him up to date with the team I was building and pieces I was adding.  He knew I had a b.g in HML and brokered loans as well as worked for lenders.  He knows I've coordinated 40+ deals as a consultant.  I kept him in the loop and showed him I was serious about building the right team around me, have a refined process for purchasing, rehabbing, and selling, and I needed to show him all I needed was the money. This past weekend we committed to do a project with him as the lender this fall.

But if this is not an outfit and a true private individual.  You need to show them that you are real, you know what you're doing.  You've seen the good and the bad of this, you know where the land mines are, and you have a business model that will make money.

How to approach a private lender

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