What are your methods to finding Private money lenders?

Question

Hi all!

I feel like I'm a fish out of water here a bit. I know that there are tons of different types of lenders but I believe for my case I would need a private money lender or hard money lender. To my knowledge, hard money lenders only do shorter terms? Not really sure.

Another issue I'm finding is the amount of money - the deals I do are typically about $30,000 and it seems like not many people are willing to lend on such a small amount. Does anyone know why?

I have, what I think, are good deals, and other properties that are owned free and clear which can be used as collateral. Does anyone know someone that would lend on this amount? Would love to have a conversation!

Here are two of my properties that I put into the bigger pockets calculator. Thanks in advance!

Amir Khan · Answer

@Fallon Gilbert I raise private money in a variety of ways using systematic tools and strategies. One of my main ways of raising private money is doing free online educational workshops. I do this in partnerships with SDIRA custodians/administrators.

Another way is by creating my own PMLs. Because of my systems, many "want to be" PMLs approach me and I do private money lending crash course for them. They then invest with me.

And yes, you can absolutely borrow $30K from PMLs. Feel free to DM if you have any questions...

James McGovern · Answer

The minimum for most lenders is $75k. The effort to underwrite a deal is the same regardless of amount lent

Elias Halvorson · Answer

Id go there, or just do a personal loan(s) from a place like sofi or a local credit union. The fees associated with small $$ DSRCs like this are pretty substantial, and the rates are not much lower than a personal loan would be.

James Stout · Answer

Thanks for laying that out — it makes a lot of sense when you break it down by fees and effort. I can see how a $30K loan still requires the same underwriting, docs, and servicing as a $100K+ loan, but the points don’t cover the lender’s time or business overhead.

Sounds like the only way smaller balance loans make sense is either:

• A niche lender who already specializes in them, or
• Structuring the deal so there’s a flat minimum fee, not just points.

A niche lender who already specializes in them, or

Structuring the deal so there’s a flat minimum fee, not just points.

Appreciate the insight — that helps me understand why most private lenders pass on these.

Jake Yuskaitis · Answer

i know a bunch of private money lenders that can cover basically anything at this point. Over the years most have come from LinkedIn. A few from google.

Erik Estrada · Answer

The issue is the exit strategy. How will you pay back the private lender? Through sale or refinance? Refinancing will be tough unless the property can appraise for $75k or more, which is the sweet spot for a few lenders.

Diana DuPre · Answer

What LTV is the $30,000 at? What type of term are you looking for?

Becky Kromminga · Answer

I would suggest you find some networking events in your area or online.  You can look on Meetups and Eventbrite.

A lot of private lending is about relationships, and meeting someone is person is a great way to start building those relationships.

Brandon Croucier · Answer

Well, I can speak on recent experience...

$30k is not worth going to court for...

Best of luck but not many people are willing to lend that little of an amount.

What are your methods to finding Private money lenders?

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