Question for Real Estate Investors Who Lend Privately

[Tammy White]

I’m a private individual lender and usually lend around $50K–$60K per deal, usually alongside other individual lenders.

I’m trying to figure out the best way to connect with more people who lend their own money — outside of just family and friends.

For those of you who lend privately, or know people who do, where have you had the best luck finding individual lenders? Not brokers, hard money companies, or loan companies — just regular people lending their own capital.

[Jeff S.]

The easiest way to find others who share a common interest is to go where they congregate, @Tammy White. Real estate club meetups, easily found at Meetup.com, are the most efficient way to find others who lend, borrow, or otherwise invest in real estate. Type “Real Estate,” enter your city or the biggest city near you, and many clubs should appear.

Like you, we loan our own money exclusively and have met almost every borrower at the local real estate clubs here in Los Angeles. It’s a common place to meet small lenders.

Also, since you’re in CA, the California Mortgage Association has a handful of smaller direct lenders ranging to $100M funds. We are members.

No matter what, just make sure you are appropriately licensed, understand usury, and the rules for fractionalizing lending. Also, understand the (enormous) risks of second position lending anywhere, but especially in CA, if that’s what you’re doing.