What's the best way to find private money lenders

9 Replies

My partner and I currently have 3 flips on the market, 2 under rehab, and 1 in the pipeline. We're trying to scale and need help funding our future deals. My question is what is the best way you have seen to get funding for rehab/purchase price aside from hard money. Hard money is great but as you know it gets expensive. I know private money and getting private lenders is key to scaling. I have been Networking at meetings and talking with family and friends and that has helped.

Also, how hard is it to get a business line of credit from a local bank. If they saw a year of successful flips and a good profitable PNL are they likely to give a line of credit? If I go to them with 50-100k in the bank would that also help or are they typically wanting to see much more than that?

Right now we're flipping and wholesaling homes near the Salt Lake City area.


An LOC would be perfect for you and it would be fairly low cost so I'd recommend talking to your bank first.

Then I would try to find some JV partners. Give away some of your profits on these flips for 85% of the capital raise.

I hate hard money and never like to use it. 

I deal with a lot of local community banks.. or lets say I have had 8 facilites like this.

6 in my home town of Portland with 6 different banks.. one in MIssissippi and one in Charleston SC.

now i have one in PDX  none in MS  and one in Charleston

they are VERY hard to get.. I would say you need at least another year or more .

50 to 100k does not cut it more like 500k in cash in the bank will raise and eyebrow.

lastly its all about relationships.. in all cases I had personal contact many lunch and follow up meetings with my bankers.. Everytime I go to Charleston i take my banker to lunch.. and yes i take him not the other way around.

but start the ball rolling and work into it.. even if its a small loan of say 100k... then get that relationship going.

some of the national lenders have programs I just got approved for 5 million today as a matter of fact. And by the way for anyone reading this it was also 2 years tax returns solid credit full underwriting.. but NO money up front not even for a the fico run... So don't get sucked into fake lenders.. 

but I had to give them HUDS of 25 deals I bought and sold in a 12 month period.. which was easy for me we are high volume but folks starting this is virtually impossible.. and of course I have years at it.. did not happen over night.

@Jay Hinrichs Hi Jay! Do you want to share the name of the bank you work with in Chuck Town? 

Don't forget to try Craigslist. I have found private money there. I also found some good private money by asking a local RE attorney if they knew any lenders. 

I am not to the point where I need to or want to use private money, but from what I’ve seen and thought about myself I think the best way is to look around at the people that you have genuine relationships with, family or otherwise. Then if you find someone like that, I personally, would keep it simple and just make them equity partners.

Another way to make it easier on yourself is broach the topic of REI with them sooner rather than later. If you do that long enough, by time you need the money they’ll be much more open to it.

In my case, I’ve got a friend who will want to do REI after he’s done with law school. He will have plenty of money, but he won’t have any time working 100 plus hours a week. By time this happens, I’ll have several years experience and probably a dozen or so properties. He’s already mentioned he’s interested so it’s really just a timing thing now.

Once you get that first private money individual and assuming it goes well, I imagine it makes finding others easier.

@Melissa Searing first reliance is another great local bank to deal with. Marc knight is who we deal with there and he has a lot of different loan options for flipping and multi family.

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