Strategies and Trends in Private Money Lending – 2025

[Ellisa Riddick]

Hi everyone,

I’m curious to hear from other private money lenders and investors — what strategies are you finding most effective in 2025 for sourcing deals and closing quickly?

Some areas I’m especially interested in:

• Creative ways to structure short-term loans for flips and rehabs

• Trends in interest rates, LTV, and loan terms for investors

• Building strong relationships with wholesalers, flippers, and landlords

• Common challenges lenders face in today’s market

Would love to hear your experiences, lessons learned, and what’s working best for you this year.

[Doug Smith]

Good question. I was a banker for many years before we started this company. I knew lending inside and out, but had no clue how to raise capital.We started out by doing small commercial bridge loans that were referred by some of my old banking buddies then we moved into buying non-performing loans...first commercial then later residential. Later we added other types of lending including SBA and we obtained an NMLS license and started a licensed mortgage company. That being said, our bread and butter is still smaller investor/builder bridge loans for construction and flipping. We tried "big capital", but they knew nothing about lending, so to this day we only work with smaller investors for our capital raises. Our structures are pretty standard. We want to understand the deal, the sponsor's experience and ability to execute, and their exit strategy. We're still 9%-12% with 1 to 3.9 points depending upon the deal and how loyal a borrower is to us. Yes, we have relationships with flippers, but most of our referrals come from banks. Banks hate real estate investors overall and they also hate to say no. It's easy for them to say "you know, that's not something our bank has an appetite for, but I know a guy...". I think out biggest challenge his balancing the capital we have in the coffers with the deal flow. Too much deal flow and not enough capital means you can't fund loyal, repeat borrower and they might look elsewhere. Too much capital and not enough deal flow and you struggle to get the return you need. We've balanced that by brokering some business when capital is light...we always seem to be raising capital. Personally, I have a ton of experience and a formal credit background, so I really know my stuff when it comes to lending, but I am painfully shy and it's a chore for me to "work the room" with capital providers. I would think that's our biggest challenge. We have deal flow and a great reputation we've built over the years, but balancing capital and deal flow is probably the biggest challenge. Great question.