Where to find private money you can trust for first real estate deal

[Pat M.]

I'm looking to do my first (hopefully of many) long term single-family home rental deal. Right now I'm planning to do a HELOC and wondering if it is the best way to go. How can I explore legitimate Private Money to help start and scale my rental portfolio.

[Patrick Roberts]

Quote from @Pat M.:

Patrick,

Thanks for the response. I was planning on funding the 25% down payment on the single-family rental purchase with a HELOC from my primary residence. I just want to see what options I might have to help me scale with this being my first property. I have found a few interesting opportunities and want to make sure I create the best foundation to build my portfolio.

Pat

Sounds like this is more of a turn-key purchase. Typically, portfolio loans from a small local bank/CU or conventional mortgages will be your cheapest/best options for permanent financing for SFHs. That being said, these will also have the strictest underwrites, including credit, DTI, and asset requirements.

Private financing or hard money is generally used for acquisition and rehab financing for properties that won't qualify for more traditional loans, when speed is a priority, or when some other aspect will roadblock traditional underwrites. These options are usually much more expensive, also, and very few private/hard money lenders will provide take-out financing. This type of money is generally used as a bridge to go from acquisition to stabilization where conventional options become available. 

NonQM loans can also close the gap between hard money and conventional mortgages for permanent financing options. The most common option is a DSCR mortgage. This will sit between conventional loans and hard money with respect to terms and underwriting requirements.

Hope this helps. If you need more in depth explanations about this or have questions, shoot me a DM. I can take care of any conventional/NonQM loans for you and can introduce you to private lenders/hard money if you would like. Also, I see that you're in Columbia, but if you feel like making the ride down to Charleston, REI Central is tomorrow night and would be well worth your time. I can introduce you to a couple of private lenders in person if you feel like attending.