Looking to start private lending!
Jobby JohnPro Member
Member since 2025 · 15 posts · 12 votesLooking to start private lending!
Most Popular Reply
This is a pretty popular question, so you might do a search here, @Jobby John. Here’s a recent response: https://www.biggerpockets.com/forums/517/topics/1265597-looking-to-become-a-private-money-lender
I’m frequently asked this question in person, and it’s almost always from those who don’t have enough money to make a first-position loan, especially in Southern California. I caution everyone to avoid 2nd position loans since they are easily wiped out in foreclosure, and to especially avoid them in Southern California due to AB130 which, until resolved, makes many 2nds essentially unenforceable. In addition, since this is a relationship-based business, I also recommend only lending locally to those you’ve personally met and gotten to know against homes you've physically walked through. That is our process.
Home prices in the Inland Empire are relatively inexpensive, so you might be in a good spot, Jobby, but it depends on the amount of cash you have to lend. You didn’t say. If it’s less than say $250k, I recommend participating in a few fractional loans. Many CA licensed real estate brokers originate these and will do all the vetting and loan servicing for you. Unless you know someone specifically, one place to find CA brokers who originate fractionalized loans is through the California Mortgage Association. Full disclosure, we are members, but are licensed CA finance lenders and not licensed brokers, so we cannot fractionalize our loans.
Do a search on the Member Directory using the word “Fractionalize” and some members who make these types of loans will appear. There are more, but the search bar is not perfect.
Last, now that you have posted publicly that you have money to lend and no experience, everyone and their brother will be soliciting you for a loan. Until you get your feet wet, I suggest you ignore these requests.
57 Replies
- 10moNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
are you already well connected in real estate? i don't really think of private lending as a beginner strategy.
- Member since 2025 · 15 posts · 12 votes10mo
@Nicholas L. I wouldn't say im well connected in real estate but I have a couple close friends who have done well as investors and they've been involved in PL for some time now. I became more interested in it as a potential avenue for greater returns in a shorter amount of time. This is all assuming the deal and borrower have been vetted etc
This is a pretty popular question, so you might do a search here, @Jobby John. Here’s a recent response: https://www.biggerpockets.com/forums/517/topics/1265597-looking-to-become-a-private-money-lender
I’m frequently asked this question in person, and it’s almost always from those who don’t have enough money to make a first-position loan, especially in Southern California. I caution everyone to avoid 2nd position loans since they are easily wiped out in foreclosure, and to especially avoid them in Southern California due to AB130 which, until resolved, makes many 2nds essentially unenforceable. In addition, since this is a relationship-based business, I also recommend only lending locally to those you’ve personally met and gotten to know against homes you've physically walked through. That is our process.
Home prices in the Inland Empire are relatively inexpensive, so you might be in a good spot, Jobby, but it depends on the amount of cash you have to lend. You didn’t say. If it’s less than say $250k, I recommend participating in a few fractional loans. Many CA licensed real estate brokers originate these and will do all the vetting and loan servicing for you. Unless you know someone specifically, one place to find CA brokers who originate fractionalized loans is through the California Mortgage Association. Full disclosure, we are members, but are licensed CA finance lenders and not licensed brokers, so we cannot fractionalize our loans.
Do a search on the Member Directory using the word “Fractionalize” and some members who make these types of loans will appear. There are more, but the search bar is not perfect.
Last, now that you have posted publicly that you have money to lend and no experience, everyone and their brother will be soliciting you for a loan. Until you get your feet wet, I suggest you ignore these requests.
- 10moDoug SmithPro MemberLender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
Hi Jobby, 35 year banker/lender here. I must say, when I first got out of college and started with a finance company, my learning curve was exponential. I can name a ton of mistakes out of the gate I made. Thank goodness I had great, professional managers that mentored me. Keep in mind, I learned in a professional lending environment with financial institutions and honed that craft over more than 3 decades. I actually did a webinar for an IRA custodian about the mistakes that private lenders made. They noticed that a lot of their novice customers were making really poor decisions based on their inexperience. Private lending is a great way to deploy capital. We originate loans for many of them, but I simply implore you to be careful and seek professional help in making loan decisions. I wish you well.
- Member since 2025 · 15 posts · 12 votes10mo
@Doug Smith I greatly appreciate your feedback and insight on this, Doug! I'll be sure to be cautious when exploring these kinds of opportunities.
- 10moMike GrudzienPro MemberLender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
At least read the "bible" on private lending, available here on BP!
https://store.biggerpockets.com/products/lend-to-live- Member since 2025 · 15 posts · 12 votes10mo
@Mike Grudzien currently on chapter 3!
- Member since 2025 · 2 posts · 0 votes10mo
Are you only looking for California investors?
- Member since 2025 · 15 posts · 12 votes10mo
@Stephnie Walker no, not necessarily. More so, looking for where or how to source legitimate PL deals
- 10moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesIN SOCAL very easy just go to the real estate clubs meetups join the club mingle will be easy to find borrowers.. FIBI is a very good one
Quote from @Jobby John:
@Stephnie Walker no, not necessarily. More so, looking for where or how to source legitimate PL deals
- Lender · Member since 2021 · 495 posts · 131 votes10mo
Quote from @Jobby John:
Hey all! My wife and I have capital that we were planning to invest into expanding our current business portfolio but plans have shifted and we want to put it into private lending. I've joined a Facebook group for private lending but there are tons of messages on there and i'm not sure what's legit or not. Any advice on where to get started or how to get connected with folks looking for capital?
Appreciate any help!
It can be a really tough learning curve. Some strategies you could consider:
1. Invest in a lender verses your own projects. Plenty of funds will pay you a good return.
2. Try to find a network of lenders to work with or joint venture with. Their experience and expertise could help save you from losses.- Member since 2025 · 15 posts · 12 votes10mo
@Andrew Zamboroski thanks Andrew!
- 10moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 957 votes
A good starting point is to work with local real estate attorneys to set up proper lending docs, then plug into reputable meetup groups, RIAs, and vetted investor networks where you can build relationships with active operators; once you get comfortable, there are plenty of solid borrowers out there, and the Midwest has a strong pipeline of off-market multifamily opportunities where private lenders are always in demand.
- Member since 2025 · 15 posts · 12 votes10mo
@Arman Ahmed thank you for the information!
- 10moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
I find the interest in private lending truly fascinating. How profitable can this business really be without scale or efficiencies? I don't lend but I would imagine at small volume, the margins get eaten alive by the operational expenses that can’t be pushed onto the borrower.
I’m not here to vouch for any particular lenders, but there are plenty of alternative lenders with long track records offering returns that exceed what most of these new private lenders will ever achieve on a net basis with short lock up periods. Why not just park your money with them? Thats far more passive as well. I would still argue anyone confident enough to lend but lacks the means to do so at scale should have the wherewithal to make more money investing in their own real estate but that's just my opinion.
And then there’s the basic question of why would a good borrower with good collateral borrow from you instead of the banks, credit unions, and established private lenders they already use? The obvious answer is that they wouldn’t. Which means the borrowers you do attract and the collateral you end up with are likely at the bottom of the barrel funding borrowers the other lenders have already passed on.
- Member since 2025 · 2 posts · 0 votes10mo
Quote from @Stuart Udis:
I find the interest in private lending truly fascinating. How profitable can this business really be without scale or efficiencies? I don't lend but I would imagine at small volume, the margins get eaten alive by the operational expenses that can’t be pushed onto the borrower.
I’m not here to vouch for any particular lenders, but there are plenty of alternative lenders with long track records offering returns that exceed what most of these new private lenders will ever achieve on a net basis with short lock up periods. Why not just park your money with them? Thats far more passive as well. I would still argue anyone confident enough to lend but lacks the means to do so at scale should have the wherewithal to make more money investing in their own real estate but that's just my opinion.
And then there’s the basic question of why would a good borrower with good collateral borrow from you instead of the banks, credit unions, and established private lenders they already use? The obvious answer is that they wouldn’t. Which means the borrowers you do attract and the collateral you end up with are likely at the bottom of the barrel funding borrowers the other lenders have already passed on.
- Member since 2025 · 15 posts · 12 votes10mo
@Stuart Udis thanks for your perspective! I would say there are a lot of "smaller" deals out there worth lending towards assuming you do the due diligence to vet the borrower and property. Borrowers looking at quick flips and projects do entertain PLs as a potential quicker way of getting the capital they need even at a higher interest rate. If it all checks out, they're able to get the money they need quicker with fewer barriers, complete their project and fulfill their loan obligation. I was interested in PL for this reason that it's a secured return without the hassle of property management etc. Of course, you don't own the asset unless you foreclose on it but the cash return can be promising.
- Member since 2025 · 15 posts · 12 votes10mo
@Jobby John to be clear, I'm not opposed to owning a rental and managing it etc. More so, I was looking at cash flowing opportunities and so I'm eager to learn more about this path
- 10moKenneth GarrettPro MemberInvestor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
@Jobby John
Private lending is definitely as a passive way to invest, but you are investing in the person as much as the deal. You must know how to analyze a deal so you know if it will be a successful project.
I have used private lenders for almost my entire career over 30 projects. Verifying the person you are lending to is critical. There experience is a must and what happens when things go wrong. You really find out about someone when things go south and how that person gets through those tough things. You only really hear about the successes, but rarely hear about the challenges.
Learn how to analyze and work with people who can execute the plan no matter what happens. I want investors who treat the funds as if grandma lent them the money.
- Member since 2025 · 15 posts · 12 votes10mo
@Kenneth Garrett thanks for the insight Kenneth!
- 10moDebbie FalesBusiness MemberLender · Annapolis, MD · Member since 2018 · 145 posts · 47 votes
When considering providing capital to a private lender for use in their deals, it really pays to do your research. You should have a good idea of how your capital is being used and what the risk levels are. For example, are they first-position mortgages? What's the average LTV for the deals? Loss rate?
Lots to consider - good luck!
Navigator Private Capital4.620 Reviews - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes10mo
I don't understand your direction of things @Jobby John
Given your focus, wouldn't it make a lot more sense to go out and hunt for GC's who have investing desires, but lack the liquidity. That you could start by finding the right operator, and then do it via JV, where you buy the property, hold ownership which now gives you securitization. You put up the funds, they do the reno work, at cost.
You come up with a flat rate tack-on, call it 4 or 5 points of cost. And than a % split of all net profits.
Now you have a repeatable, scalable model with a small repeat circle.
Less people = less risk. Holding the asset = less risk. Having a JV with a person that has cost controls and discounts = less risk.
My wife does this type of lending and the default rate is something it seems nobody ever speaks about or thinks about. Yes it's high, very high. That's why the interest rates are what they are, it's not some profit-fest, it's monetizing the expense of that operation.
You will loose $, that's just a fact of that business, 100% certainty it will happen. And then it will happen again, and again. It's a big #'s game, that the wins off-set the losses to a point that it's a net profitable venture. Not being very well experienced can easily put a person into the wrong side of the ratio.
It's juggling chainsaws. Pretty cool and exciting when it's all going right. Until "whoops"....
- 10moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Jobby John you should connect with @Jay Hinrichs, who has a TON of experience.
Also, if you're willing to lend in Metro Detroit...
Logical Property Management4.9460 Reviews- 10moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Drew Sygit:
@Jobby John you should connect with @Jay Hinrichs, who has a TON of experience.
Also, if you're willing to lend in Metro Detroit...
i defer to @Jeff S. for ca private lending I do know you need a license unless your doing maybe one or two a year there could be a carve out. I did all mine as fractionoalized firsts and with my CA RE Broker license
- 10moJake YuskaitisBusiness MemberLender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
i would broker loans first before you start lending your own funds. get to know the processes inside and out and brush up on basic accounting and corporate finance.
Frontier Funding LLC533 Reviews- 10moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Jake Yuskaitis:
i would broker loans first before you start lending your own funds. get to know the processes inside and out and brush up on basic accounting and corporate finance.
In CA you need a license to broker non owner occ loans.. either MLO with NMLS registration or CA RE Broker that takes a few years to get or a CFL - 10moJake YuskaitisBusiness MemberLender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
Quote from @Jay Hinrichs:
Quote from @Jake Yuskaitis:
i would broker loans first before you start lending your own funds. get to know the processes inside and out and brush up on basic accounting and corporate finance.
In CA you need a license to broker non owner occ loans.. either MLO with NMLS registration or CA RE Broker that takes a few years to get or a CFLcorrect
Frontier Funding LLC533 Reviews
- Lender · Palo Alto, CA · Member since 2017 · 142 posts · 91 votes10mo
Hey @Jobby John, I have seen some great responses here so far! I will just say, if you're interested in talking to another CA based Private Lender, feel free to reach out. I lend out of state and in states that need no licensing to do so, at smaller $ amount risks, and great returns with well-vetted borrowers! Best of luck sir!
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes10mo
Ignore Facebook and never lend to anyone on Facebook.
as a lender do you know how to underwrite and orignate a deal? If not I suggest buying loans that were from lenders - they did all the work and you can collect the interest
7e investments53 Reviews - 10moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Jobby John:
Hey all! My wife and I have capital that we were planning to invest into expanding our current business portfolio but plans have shifted and we want to put it into private lending. I've joined a Facebook group for private lending but there are tons of messages on there and i'm not sure what's legit or not. Any advice on where to get started or how to get connected with folks looking for capital?
Appreciate any help!
Hey Jobby, welcome to BP — and good call being cautious because private lending can be a great strategy but it’s definitely an area where you want to vet people carefully. A solid place to start is getting connected with investors who operate in markets with strong fundamentals, because they usually have steady deal flow and are always looking for reliable lenders. One market you might want to look into is Columbus, Ohio since the macroeconomics here are on fire with huge population growth, tons of job creation, and massive companies moving in like Intel, Amazon, Google, Facebook, Honda, Microsoft, LG, and more. Because deals here still pencil out — you can regularly see properties in the $120–180k range that hit the 1% rule and cash flow day one — a lot of investors are active and constantly in need of lending partners. I moved from Portland to Columbus in 2020 to invest and now own 10+ rentals, and I’ve met tons of lenders who do really well here simply because the demand is so strong and the numbers make sense. Start by building relationships with experienced local investors, agents, and operators rather than responding to random online posts, and you’ll find much safer and higher-quality opportunities. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9120 Reviews- 10moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Jimmy Lieu:
Quote from @Jobby John:
Hey all! My wife and I have capital that we were planning to invest into expanding our current business portfolio but plans have shifted and we want to put it into private lending. I've joined a Facebook group for private lending but there are tons of messages on there and i'm not sure what's legit or not. Any advice on where to get started or how to get connected with folks looking for capital?
Appreciate any help!
Hey Jobby, welcome to BP — and good call being cautious because private lending can be a great strategy but it’s definitely an area where you want to vet people carefully. A solid place to start is getting connected with investors who operate in markets with strong fundamentals, because they usually have steady deal flow and are always looking for reliable lenders. One market you might want to look into is Columbus, Ohio since the macroeconomics here are on fire with huge population growth, tons of job creation, and massive companies moving in like Intel, Amazon, Google, Facebook, Honda, Microsoft, LG, and more. Because deals here still pencil out — you can regularly see properties in the $120–180k range that hit the 1% rule and cash flow day one — a lot of investors are active and constantly in need of lending partners. I moved from Portland to Columbus in 2020 to invest and now own 10+ rentals, and I’ve met tons of lenders who do really well here simply because the demand is so strong and the numbers make sense. Start by building relationships with experienced local investors, agents, and operators rather than responding to random online posts, and you’ll find much safer and higher-quality opportunities. Happy to connect and answer any questions you have!
jimmy you Columbus agents have a great way of turning every investment into one in Columbus kind of commical.. But dont blame you for leaving PDX so did I .. governance there is out of their mind. - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes10mo
Quote from @Jay Hinrichs:
Quote from @Jimmy Lieu:
Quote from @Jobby John:
Hey all! My wife and I have capital that we were planning to invest into expanding our current business portfolio but plans have shifted and we want to put it into private lending. I've joined a Facebook group for private lending but there are tons of messages on there and i'm not sure what's legit or not. Any advice on where to get started or how to get connected with folks looking for capital?
Appreciate any help!
Hey Jobby, welcome to BP — and good call being cautious because private lending can be a great strategy but it’s definitely an area where you want to vet people carefully. A solid place to start is getting connected with investors who operate in markets with strong fundamentals, because they usually have steady deal flow and are always looking for reliable lenders. One market you might want to look into is Columbus, Ohio since the macroeconomics here are on fire with huge population growth, tons of job creation, and massive companies moving in like Intel, Amazon, Google, Facebook, Honda, Microsoft, LG, and more. Because deals here still pencil out — you can regularly see properties in the $120–180k range that hit the 1% rule and cash flow day one — a lot of investors are active and constantly in need of lending partners. I moved from Portland to Columbus in 2020 to invest and now own 10+ rentals, and I’ve met tons of lenders who do really well here simply because the demand is so strong and the numbers make sense. Start by building relationships with experienced local investors, agents, and operators rather than responding to random online posts, and you’ll find much safer and higher-quality opportunities. Happy to connect and answer any questions you have!
jimmy you Columbus agents have a great way of turning every investment into one in Columbus kind of commical.. But dont blame you for leaving PDX so did I .. governance there is out of their mind.That's not actually Jimmy your replying to, it's Jimmy's ai. He's got an ai zap'd into crawling and auto responding BP posts.
- 10moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @Jimmy Lieu:
Quote from @Jobby John:
Hey all! My wife and I have capital that we were planning to invest into expanding our current business portfolio but plans have shifted and we want to put it into private lending. I've joined a Facebook group for private lending but there are tons of messages on there and i'm not sure what's legit or not. Any advice on where to get started or how to get connected with folks looking for capital?
Appreciate any help!
Hey Jobby, welcome to BP — and good call being cautious because private lending can be a great strategy but it’s definitely an area where you want to vet people carefully. A solid place to start is getting connected with investors who operate in markets with strong fundamentals, because they usually have steady deal flow and are always looking for reliable lenders. One market you might want to look into is Columbus, Ohio since the macroeconomics here are on fire with huge population growth, tons of job creation, and massive companies moving in like Intel, Amazon, Google, Facebook, Honda, Microsoft, LG, and more. Because deals here still pencil out — you can regularly see properties in the $120–180k range that hit the 1% rule and cash flow day one — a lot of investors are active and constantly in need of lending partners. I moved from Portland to Columbus in 2020 to invest and now own 10+ rentals, and I’ve met tons of lenders who do really well here simply because the demand is so strong and the numbers make sense. Start by building relationships with experienced local investors, agents, and operators rather than responding to random online posts, and you’ll find much safer and higher-quality opportunities. Happy to connect and answer any questions you have!
jimmy you Columbus agents have a great way of turning every investment into one in Columbus kind of commical.. But dont blame you for leaving PDX so did I .. governance there is out of their mind.That's not actually Jimmy your replying to, it's Jimmy's ai. He's got an ai zap'd into crawling and auto responding BP posts.
OK have no clue what that is but if you say so .. those Columbus boys are pretty sharp on their marketing and using BP to their advantage. If I was a young agent starting out I am sure I would ge doing the same thing.. if Mods dont take it down then its a legal post.. I was just commenting on how many times this guy posts on threads that have nothing to do with Columbus but it ends up a advertisement for that city. - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes10mo
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @Jimmy Lieu:
Quote from @Jobby John:
Hey all! My wife and I have capital that we were planning to invest into expanding our current business portfolio but plans have shifted and we want to put it into private lending. I've joined a Facebook group for private lending but there are tons of messages on there and i'm not sure what's legit or not. Any advice on where to get started or how to get connected with folks looking for capital?
Appreciate any help!
Hey Jobby, welcome to BP — and good call being cautious because private lending can be a great strategy but it’s definitely an area where you want to vet people carefully. A solid place to start is getting connected with investors who operate in markets with strong fundamentals, because they usually have steady deal flow and are always looking for reliable lenders. One market you might want to look into is Columbus, Ohio since the macroeconomics here are on fire with huge population growth, tons of job creation, and massive companies moving in like Intel, Amazon, Google, Facebook, Honda, Microsoft, LG, and more. Because deals here still pencil out — you can regularly see properties in the $120–180k range that hit the 1% rule and cash flow day one — a lot of investors are active and constantly in need of lending partners. I moved from Portland to Columbus in 2020 to invest and now own 10+ rentals, and I’ve met tons of lenders who do really well here simply because the demand is so strong and the numbers make sense. Start by building relationships with experienced local investors, agents, and operators rather than responding to random online posts, and you’ll find much safer and higher-quality opportunities. Happy to connect and answer any questions you have!
jimmy you Columbus agents have a great way of turning every investment into one in Columbus kind of commical.. But dont blame you for leaving PDX so did I .. governance there is out of their mind.That's not actually Jimmy your replying to, it's Jimmy's ai. He's got an ai zap'd into crawling and auto responding BP posts.
OK have no clue what that is but if you say so .. those Columbus boys are pretty sharp on their marketing and using BP to their advantage. If I was a young agent starting out I am sure I would ge doing the same thing.. if Mods dont take it down then its a legal post.. I was just commenting on how many times this guy posts on threads that have nothing to do with Columbus but it ends up a advertisement for that city.I was just making you aware, I am pretty sure he's almost totally hand's-off his BP account anymore and it's all but exclusively ai who run's his account and does the talking for him now, as I very rarely see anything but ai coming from his account anymore.
And to be clear, I don't fault the hustle, hell I think he's doing awesome. He's gotten his ai dialed in at a level most don't even know exists.
BP has clearly chosen that if a person pay's them enough $ on account's, they will turn a blind-eye and allow ai to run because some of it is rather obvious. Obvious to those into ai, who know it, the indicators etc..
I am very deep into ai, I just havn't deployed it in the same way as him as of yet. See I'm honest, I say yet because I don't know what the future holds. If my persona agent get's better, and have some better controls to review what ai-James is reply to and the reply, yeah, I too will probably let it off the currently very short leash I have it on.
I have all my ai's running in "lab" setting's and as support "staff" positions; analysis, underwriting, scrapping data, signal analysis.
For analysis side Jay, it would blow your mind how good ai can be. There is an art and a science on how to setup ai, train it, keep it honest and accurate, but get that right and holly-cow it's capabilities are mind blowing.
If haven't tried it on DD yet, I strongly suggest trying it out there. Get your last 100 deals historical data together and train it on that data-set. Then give it a new one to give an analysis of and see what it does.
- 10moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @Jimmy Lieu:
Quote from @Jobby John:
Hey all! My wife and I have capital that we were planning to invest into expanding our current business portfolio but plans have shifted and we want to put it into private lending. I've joined a Facebook group for private lending but there are tons of messages on there and i'm not sure what's legit or not. Any advice on where to get started or how to get connected with folks looking for capital?
Appreciate any help!
Hey Jobby, welcome to BP — and good call being cautious because private lending can be a great strategy but it’s definitely an area where you want to vet people carefully. A solid place to start is getting connected with investors who operate in markets with strong fundamentals, because they usually have steady deal flow and are always looking for reliable lenders. One market you might want to look into is Columbus, Ohio since the macroeconomics here are on fire with huge population growth, tons of job creation, and massive companies moving in like Intel, Amazon, Google, Facebook, Honda, Microsoft, LG, and more. Because deals here still pencil out — you can regularly see properties in the $120–180k range that hit the 1% rule and cash flow day one — a lot of investors are active and constantly in need of lending partners. I moved from Portland to Columbus in 2020 to invest and now own 10+ rentals, and I’ve met tons of lenders who do really well here simply because the demand is so strong and the numbers make sense. Start by building relationships with experienced local investors, agents, and operators rather than responding to random online posts, and you’ll find much safer and higher-quality opportunities. Happy to connect and answer any questions you have!
jimmy you Columbus agents have a great way of turning every investment into one in Columbus kind of commical.. But dont blame you for leaving PDX so did I .. governance there is out of their mind.That's not actually Jimmy your replying to, it's Jimmy's ai. He's got an ai zap'd into crawling and auto responding BP posts.
OK have no clue what that is but if you say so .. those Columbus boys are pretty sharp on their marketing and using BP to their advantage. If I was a young agent starting out I am sure I would ge doing the same thing.. if Mods dont take it down then its a legal post.. I was just commenting on how many times this guy posts on threads that have nothing to do with Columbus but it ends up a advertisement for that city.I was just making you aware, I am pretty sure he's almost totally hand's-off his BP account anymore and it's all but exclusively ai who run's his account and does the talking for him now, as I very rarely see anything but ai coming from his account anymore.
And to be clear, I don't fault the hustle, hell I think he's doing awesome. He's gotten his ai dialed in at a level most don't even know exists.
BP has clearly chosen that if a person pay's them enough $ on account's, they will turn a blind-eye and allow ai to run because some of it is rather obvious. Obvious to those into ai, who know it, the indicators etc..
I am very deep into ai, I just havn't deployed it in the same way as him as of yet. See I'm honest, I say yet because I don't know what the future holds. If my persona agent get's better, and have some better controls to review what ai-James is reply to and the reply, yeah, I too will probably let it off the currently very short leash I have it on.
I have all my ai's running in "lab" setting's and as support "staff" positions; analysis, underwriting, scrapping data, signal analysis.
For analysis side Jay, it would blow your mind how good ai can be. There is an art and a science on how to setup ai, train it, keep it honest and accurate, but get that right and holly-cow it's capabilities are mind blowing.
If haven't tried it on DD yet, I strongly suggest trying it out there. Get your last 100 deals historical data together and train it on that data-set. Then give it a new one to give an analysis of and see what it does.
I can do my deals in my head :) really I dont need number crutch.. some day though - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes10mo
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @Jimmy Lieu:
Quote from @Jobby John:
Hey all! My wife and I have capital that we were planning to invest into expanding our current business portfolio but plans have shifted and we want to put it into private lending. I've joined a Facebook group for private lending but there are tons of messages on there and i'm not sure what's legit or not. Any advice on where to get started or how to get connected with folks looking for capital?
Appreciate any help!
Hey Jobby, welcome to BP — and good call being cautious because private lending can be a great strategy but it’s definitely an area where you want to vet people carefully. A solid place to start is getting connected with investors who operate in markets with strong fundamentals, because they usually have steady deal flow and are always looking for reliable lenders. One market you might want to look into is Columbus, Ohio since the macroeconomics here are on fire with huge population growth, tons of job creation, and massive companies moving in like Intel, Amazon, Google, Facebook, Honda, Microsoft, LG, and more. Because deals here still pencil out — you can regularly see properties in the $120–180k range that hit the 1% rule and cash flow day one — a lot of investors are active and constantly in need of lending partners. I moved from Portland to Columbus in 2020 to invest and now own 10+ rentals, and I’ve met tons of lenders who do really well here simply because the demand is so strong and the numbers make sense. Start by building relationships with experienced local investors, agents, and operators rather than responding to random online posts, and you’ll find much safer and higher-quality opportunities. Happy to connect and answer any questions you have!
jimmy you Columbus agents have a great way of turning every investment into one in Columbus kind of commical.. But dont blame you for leaving PDX so did I .. governance there is out of their mind.That's not actually Jimmy your replying to, it's Jimmy's ai. He's got an ai zap'd into crawling and auto responding BP posts.
OK have no clue what that is but if you say so .. those Columbus boys are pretty sharp on their marketing and using BP to their advantage. If I was a young agent starting out I am sure I would ge doing the same thing.. if Mods dont take it down then its a legal post.. I was just commenting on how many times this guy posts on threads that have nothing to do with Columbus but it ends up a advertisement for that city.I was just making you aware, I am pretty sure he's almost totally hand's-off his BP account anymore and it's all but exclusively ai who run's his account and does the talking for him now, as I very rarely see anything but ai coming from his account anymore.
And to be clear, I don't fault the hustle, hell I think he's doing awesome. He's gotten his ai dialed in at a level most don't even know exists.
BP has clearly chosen that if a person pay's them enough $ on account's, they will turn a blind-eye and allow ai to run because some of it is rather obvious. Obvious to those into ai, who know it, the indicators etc..
I am very deep into ai, I just havn't deployed it in the same way as him as of yet. See I'm honest, I say yet because I don't know what the future holds. If my persona agent get's better, and have some better controls to review what ai-James is reply to and the reply, yeah, I too will probably let it off the currently very short leash I have it on.
I have all my ai's running in "lab" setting's and as support "staff" positions; analysis, underwriting, scrapping data, signal analysis.
For analysis side Jay, it would blow your mind how good ai can be. There is an art and a science on how to setup ai, train it, keep it honest and accurate, but get that right and holly-cow it's capabilities are mind blowing.
If haven't tried it on DD yet, I strongly suggest trying it out there. Get your last 100 deals historical data together and train it on that data-set. Then give it a new one to give an analysis of and see what it does.
I can do my deals in my head :) really I dont need number crutch.. some day thoughAnd that's the point. Those using ai as a crutch are using it wrong.
When using it as an augmentation tool, an improving tool like hiring a Yale Graduate quant super genius. Picture, what if you could hire a quant, who won the Chinese mathathon at 12, who had a Phd of economics and finance, would you tell that person to get coffee?
No, you'd task them to do some super # crunch, so you could elevate the work you already do, just do it better, faster, with an even deeper level insight of things.
That is proper ai use, augmentation.
Because that's who and what ai is, that genius level multi-Phd, and there willing to work for literally cent's per hour.
Picture that human walks in the door seeking a job and say's they will happily accept $1.25hr. You'd hire em on the spot, right. Even if didn't know how you'd use em, you'd hire em, and figure out where to plug them in. Because the value proposition is just too great. THAT is ai.
@Jobby John hey I'm a real estate investor and buy all over the inland empire I actually live in norco ca let's connect !
- Member since 2023 · 1 post · 0 votes10mo
Hello my name is Henry, im a real estate investor here in the inland empire. I have flipped close to 10 million dollars in real estate & I saw that your in riverside I actually live in norco & would love to connect to see how you can start private money lending to me let’s connect.
- Member since 2023 · 10 posts · 0 votes10mo
There is a lot of nuance to private lending. Usury laws in different states vary, ect. One way to jump into this is by working with an experienced "connector." Someone who can act as a filter to bring you deals that make more sense and come with the right paperwork, with investors that have a proven track record of project completion and repayment (Ofcourse, still perform your own due diligence for every deal) But this can help avoid some of the chaos in a facebook group.
Quote from @Mehrose Akhtar:
There is a lot of nuance to private lending. Usury laws in different states vary, ect. One way to jump into this is by working with an experienced "connector." Someone who can act as a filter to bring you deals that make more sense and come with the right paperwork, with investors that have a proven track record of project completion and repayment (Ofcourse, still perform your own due diligence for every deal) But this can help avoid some of the chaos in a facebook group.
With all due respect to Mehrose, this is the last thing you want to do, @Jobby John. The easiest way to lose a lot of money is lend to out of state to strangers, against properties you haven’t seen, located in areas you’d need a map to find, when you’ve never made a loan before. There is no nuance. Once you develop a system, lending is as repeatable and mechanical as it gets. I’m not even sure what “nuance” means in this context.
Nor can I guess what a “connector” is. Anyone can refer a deal, but in CA you’ll need to be a licensed broker or use one to originate a loan for you. “Broker” is a legal term. Alternatively, you can become a CA Finance lender and originate loans for yourself. Period.
Learn some lending basics before you loan a dime to anyone. This means spending some time with a lending attorney. It will take some time to develop and refine your lending criteria and to meet potential borrowers.
Facebook and BP are fun and interesting, but not reliable places to learn how to lend or to find borrowers. This is a business based on relationships. Face-to-face, eyeball-to-eyeball at local real estate clubs are your safest bet.
You were wise enough to earn your money, Jobby, so I’m confident you’re wise enough to protect it. Keep it local.
- 10moMary McGintyPro MemberRental Property Investor · San Francisco, CA · Member since 2021 · 71 posts · 15 votes
Hi Jobby, I am real estate investor with experience wigh fix and flips, buy and hold and multifamily. I have been a private money lender, A connector and I also raise capital. A great way to start is going to local real estate meet ups and start to building Relationships, with local investors. I’d be happy to jump on a zoom call with you and answer any questions. I am in California in the Bay Area.
Mary- 10moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Mary McGinty:
Hi Jobby, I am real estate investor with experience and fixing flips, buying and multifamily. I have been a private money lender, A connector and I also raise capital. A great way to start is going to local real estate meet ups and start to building Relationships, local investors. I’d be happy to jump on a zoom call with you and answer any questions I am in California in the Bay Area Mary
one thing also other than usary is to check license requirements like CA most lending activity if not all requires a license.. 14 states require licenses for NON owner occ 1 to 4 units.. the rest do not.. its pretty easy to check on license requirements per state.. but for CA for example u can lend money on deals with a CA RE BRoker license an MLO license or consumer finance license. what most folks do that dont have a license in CA is hire a good RE broker to do the paper work for ( mainly disclosures ) to keep you legal.
PS Mary my daughter was born in Kelseyville :) - 9moMary McGintyPro MemberRental Property Investor · San Francisco, CA · Member since 2021 · 71 posts · 15 votes
Quote from @Jay Hinrichs:
Quote from @Mary McGinty:
Hi Jay, I am real estate investor with experience in fix and flips, buying & hold and multifamily. I have been a private money lender, A connector and I also raise capital. A great way to start is going to local real estate meet ups and start to building Relationships, local investors. I’d be happy to jump on a zoom call with you and answer any questions I am in California in the Bay Area Mary
one thing also other than usary is to check license requirements like CA most lending activity if not all requires a license.. 14 states require licenses for NON owner occ 1 to 4 units.. the rest do not.. its pretty easy to check on license requirements per state.. but for CA for example u can lend money on deals with a CA RE BRoker license an MLO license or consumer finance license. what most folks do that dont have a license in CA is hire a good RE broker to do the paper work for ( mainly disclosures ) to keep you legal.
PS Mary my daughter was born in Kelseyville :)
- Specialist · Member since 2025 · 48 posts · 11 votes10mo
Hey Jobby, great move exploring private lending. One helpful way to get started is to look for investors in your local market who have recently closed deals — they often show up in public records when they record mortgages or deeds, so you can see who is actively buying and might need capital.
You can also connect with investors at local REI meetups or through title companies, since they regularly work with people who borrow private money for flips and rentals.
Once you talk to a few, you’ll get a much clearer sense of typical terms, risk levels, and how others structure their lending safely.
- Member since 2025 · 15 posts · 12 votes10mo
@Grace Lilly thanks for the feedback Grace!
Hi @Jobby John
Private lending is a fantastic way to earn passive income — far more passive than owning, managing, or flipping properties. I can understand why you made this shift! It does come with risks, but those risks can be significantly reduced with the right structure.I’ve been lending through my SDIRA and I only lend in first position, secured by a specific property with a recorded mortgage/deed of trust. I also underwrite the borrower, confirm insurance, and make sure there’s lender title protection — those steps alone help eliminate many of the common pitfalls I see new lenders encounter.
If you’re just getting started, it’s helpful to get clarity on:
• the collateral securing the loan
• the loan-to-value
• borrower track record
• how your SDIRA custodian handles notes
• what protections you should have in placeI’m happy to share what I’ve learned — I really enjoy helping people get started in private lending. Feel free to DM me if you want to compare notes or talk through anything
- Investor · Austin, TX · Member since 2021 · 497 posts · 127 votes9mo
Are you thinking short-term, deal-specific loans or something longer-term?
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