Where are the private equity lenders?
Member since 2019 · 18 posts · 4 votes
Where are the private equity lenders?
Most Popular Reply
Investor · Raleigh, NC · Member since 2013 · 1k+ posts · 708 votes
6yI can see that you might be displeased with Jay's response, but that doesn't mean he is wrong. Private lenders are typically found amongst your family or circle of friends. Sometimes, you can find them by networking and establishing a personal connection with someone. The key point is that private lenders might consider lending you money because they already know and trust you. This will allow them to take a chance on you where a purely commercial lender might not. For example, you say that your credit score is insufficient for a bank or hard money lender. Well, your brother, or your uncle, or your bestie, may not care that much about your credit score. They know that you will pay back the loan because they trust your character. Well, a bank or commercial lender does not operate on that basis - they deal with facts, credit scores, risk analysis, etc. A possible exception might be a hard money lender who may take a chance on you if you present a solid deal, but they will want to be compensated for this risk by charging 5 points upfront and 15% interest.
So, all of this means that coming to a public board like BP and asking "where are all the private lenders" is an oxymoron. By definition a private lender is someone you know already, so you won't find any here. That's what Jay was pointing out.
29 Replies
- Member since 2019 · 18 posts · 4 votes6y
So far disappointed with Bigger Pockets website Forum.No reason to pay for Pro.
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes6y
What are you looking for? Lenders are a dime a dozen.
- Member since 2019 · 18 posts · 4 votes6y
Looking for private equity lenders to fix rental properties.
These properties were purchased and inherited from family.
Fixed the properties from 70's disasters to neutral modern.
Had never thought of using equity until my credit score took a hit when some big repairs came up that were too much to fix with rental income.
Banks said they're interested, just need to bring score up 100 points. Catch 22. The rentals have been my income. Before I started listing every podcast listened to, I Listened to a guy on Bigger Pockets talk about getting a private equity loan to pay off credit, got credit fixed, got a loan from the bank and paid the private equity lender and purchased more rentals. Looking for 30 year fixed rate but plan to pay off Private loan right away, get a bank loan, pay private lender, purchase more rentals. Then one day I will do the same for someone else.
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Jennifer Ryan:
Looking for private equity lenders to fix rental properties.
These properties were purchased and inherited from family.
Fixed the properties from 70's disasters to neutral modern.
Had never thought of using equity until my credit score took a hit when some big repairs came up that were too much to fix with rental income.
Banks said they're interested, just need to bring score up 100 points. Catch 22. The rentals have been my income. Before I started listing every podcast listened to, I Listened to a guy on Bigger Pockets talk about getting a private equity loan to pay off credit, got credit fixed, got a loan from the bank and paid the private equity lender and purchased more rentals. Looking for 30 year fixed rate but plan to pay off Private loan right away, get a bank loan, pay private lender, purchase more rentals. Then one day I will do the same for someone else.
YOur confused as to what private equity is. that's evident.
- Member since 2019 · 18 posts · 4 votes6y
Please explain Jay Hinrichs.
"YOur confused as to what private equity is. That's evident."
Please explain. Or someone else please explain.
Here to learn.
- Member since 2019 · 18 posts · 4 votes6y
Jay Hinrich, " YOur confused as to what private equity is, that's evident." So please explain so I'm less confused, what don't I understand?
Jay Hinrich you're comment was kind of rude.
I'm new to this forum, I'm here looking for resources and to learn.
What kind of people are on this forum?
Josh and Brandon sure give a different impression about it.
Guess I shouldn't blame the entire forum, I'm sure there are great people on here somewhere.
- Investor · Raleigh, NC · Member since 2013 · 1k+ posts · 708 votes6y
I can see that you might be displeased with Jay's response, but that doesn't mean he is wrong. Private lenders are typically found amongst your family or circle of friends. Sometimes, you can find them by networking and establishing a personal connection with someone. The key point is that private lenders might consider lending you money because they already know and trust you. This will allow them to take a chance on you where a purely commercial lender might not. For example, you say that your credit score is insufficient for a bank or hard money lender. Well, your brother, or your uncle, or your bestie, may not care that much about your credit score. They know that you will pay back the loan because they trust your character. Well, a bank or commercial lender does not operate on that basis - they deal with facts, credit scores, risk analysis, etc. A possible exception might be a hard money lender who may take a chance on you if you present a solid deal, but they will want to be compensated for this risk by charging 5 points upfront and 15% interest.
So, all of this means that coming to a public board like BP and asking "where are all the private lenders" is an oxymoron. By definition a private lender is someone you know already, so you won't find any here. That's what Jay was pointing out.
- Member since 2019 · 18 posts · 4 votes6y
Thank you Andrew S.
I get what you're saying.
Although there are wealthy people willing to take a risk out there if someone has full equity, So I heard on the podcast.
With high interest and a house for almost nothing if a loan is not paid off, it's a great deal for a real estate investor.
Can't get that kind of return with stocks.
Guess not any low risk takers on Bigger Pockets, like you said.
Josh Dorkin said there were plenty of people with a lot of money wanting to help people and get a return.
Because during the ressesion even good credit investors couldn't get conventional loans.
Which increased private lending.
As far as I understood it, a Private lender is just a regular person with enough money to lend.
I'd help someone who had full equity in several houses with higher interest if I had a huge amount of money and the house had good profit potential.
Almost every investor on the podcast says persistence pays. Guess time will tell.
If I didn't have the a lot of equity, I wouldn't of posted this comment.
Thank you for your reply.
Maybe someday I'll be on the podcast telling this before story.
Heres to success in real estate investing. 🏡🏠🏡
- Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes6y
THere are so many scams out there that people are usually NOT going to just lend someone that they do not know some money, even if it is a high equity property. How do I even know that you own the property?? AGAIN, ask people that you know and already have a relationship with. Tell your story to people who are your facebook friends, linked in friends, etc. Someone who knows you will want to help you. You are not going to find people on a forum like this, even as you say you have high equity.
Even friends and family want to see that you have taken a property and done something with it. They want to see that you are successful with what you have. Most people want to help, but they also want to know that they are investing in something that is pretty much a sure thing. If you have shown that you are responsible with your own money, they may want to help. Good luck!!
- Investor · Raleigh, NC · Member since 2013 · 1k+ posts · 708 votes6y
Originally posted by @Jennifer Ryan:
Thank you Andrew S.
I get what you're saying.
Although there are wealthy people willing to take a risk out there if someone has full equity, So I heard on the podcast.
With high interest and a house for almost nothing if a loan is not paid off, it's a great deal for a real estate investor.
Can't get that kind of return with stocks.
Guess not any low risk takers on Bigger Pockets, like you said.
Josh Dorkin said there were plenty of people with a lot of money wanting to help people and get a return.
Because during the ressesion even good credit investors couldn't get conventional loans.
Which increased private lending.
As far as I understood it, a Private lender is just a regular person with enough money to lend.
I'd help someone who had full equity in several houses with higher interest if I had a huge amount of money and the house had good profit potential.
Almost every investor on the podcast says persistence pays. Guess time will tell.
If I didn't have the a lot of equity, I wouldn't of posted this comment.
Thank you for your reply.
Maybe someday I'll be on the podcast telling this before story.
Heres to success in real estate investing. 🏡🏠🏡
One more thing: if you have really tried and tapped out all your friends and family, then networking is your next step. Go to your local REI meeting and tell everyone about your deal. Get to know people. Once you have established yourself, there may well be folks who are willing to entertain financing your deal. But again, it is about establishing a personal relationship of some sort. This is almost impossible to do purely online. That said, there are A FEW people on this forum who have established themselves to such an extent here on this board that "private lenders" might consider doing business with them without ever meeting them (and, in my opinion, Jay Hinrichs is one of those rare birds - but you will have noticed that he has >30'000 posts/votes, and you have 12), but for the rest of us, its strictly a belly-to-belly thing.
- 6yDaniel DietzPro MemberRental Property Investor · Reedsburg, WI · Member since 2011 · 1k+ posts · 857 votes
@Jennifer Ryan, I think the others are hitting on some key points. It is, from what I find, all about relationships whether in person, your local REI, the BPCON2019, over time on line, etc....
I started reading here on BP about 7-8 years ago when getting started. TONS of knowledge to apply (for example we do SDIRA & SOLO401K investing, partnered in 4 different LLCs, have used Private Money Lenders and Private Money Partners and soon a 1031 Exchange etc... ALL that I learned on here)
The Lenders/Partners that we have used, along with a couple partners waiting for us to find more deals in our rural area, all came from relationships of some kind.
My first partners were family and we all used SDIRAs to buy rentals together and have a bigger pool of money.
I flipped a house with nothing down because I did construction work for the wholesaler that sold it to me and we trusted each other. I borrowed the fix up money on that from a Private Lender, who is a family friend and we were in an investment club together so I knew he had money to put to work. I put in the labor myself on that one.
The fix up lender then lent to our SDIRA LLC as a HELOC on a property we owned free and clear at 60% LTV so we could use that for a down payment on a 4 plex. Repeated that a couple times.
We then started to bring in Private Money Partners instead of Lenders where they bring ALL the down payment and we do ALL the work and split 50-50.
We now have several people wanting to partner as we find the right deals.
My local small REI meeting of about 15-25 people has people willing to lend, but it took a couple of years of going and getting to know them first.
There is a 'market place' here on BP that may have what you are looking for.
Have you considered 'commerical' or portfolio lenders? We use those on our LLCs as we cant get conventional loans for those. They are based more on the deal than your personal credit. We can essentially take up to 80% LTV looked for 10 years on those.
Can you tell us a bit more about your property values, conditions, vacancy rates etc... and we might be able to help you more.
Dan Dietz
- 6yKevin FengPro MemberNJ · Member since 2019 · 29 posts · 13 votes
@Jennifer Ryan plenty. I am working with one now. RCD capital.
- 6yKerry BairdPro MemberRental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
I have gotten in a similar position, and got a HELOC to pay off the renovation on credit cards. The payments were lower on the HELOC, so I could pay it off more easily. You can get home equity loans from local credit unions, community banks, TD Bank, PenFed, TRUSTCO and a handful of others.
- Member since 2019 · 18 posts · 4 votes6y
The biggest thing I've learned on Bigger Pockets is
Don't listen to nay sayers!
Don't tell me why I can't
Tell me how I can.
- Cheshire, CT · Member since 2018 · 87 posts · 60 votes6y
The Podcast is sunshine and rainbows. The forums are the real world. That's been my experience so far. Not that I have any properties, but the two are definitely different worlds.
Your best bet in investing is finding someone near you doing it. Ask around. Talk to people in your area. It's much easier for me to make a first impression in person than online.
- 6yMindy JensenPro MemberBiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
Originally posted by @Jennifer Ryan:
The biggest thing I've learned on Bigger Pockets is
Don't listen to nay sayers!
Don't tell me why I can't
Tell me how I can.
Our forum posting rules prohibit looking for funding in the regular forums. Posts looking for funding will be removed.
Private lenders are people you know in your every day life.
Hard Money lenders are similar-but-different in that they do this as a profession. You can find a list at www.biggerpockets.com/hml
- Member since 2019 · 18 posts · 4 votes6y
Scott Kimberly.
That's for sure. I've been trying to see if it's worth it all the hype.
I can get all the information on here by searching the net and it's less cumbersome.
The podcasts makes it sound great
Now it only seems like a big advertisement to get people to pay for pro. and nobody is honest about it because everyone is trying to get aproval and be a part of the team.So maybe if I get Pro, have 100k or more posts own 50 houses, 200 apartment units with at least a few million in the bank. Then maybe there would be some approval.
The podcast is very inspiring but this forum makes me not want to listen to the podcast anymore and I've been listening for years to Josh Dorkin and Brandon Turner and just as I was about to type Mindy Jenson. Mindy herself tells me I'm in the wrong forum when I thought I clicked on the section for this discussion and that my post will be removed.
I don't know what to say about that but this forum has changed my opinion of Bigger Pockets
- Investor · Owensboro Ky · Member since 2018 · 183 posts · 68 votes6y
@Jennifer Ryan hey I understand how you feel I used to feel that way the podcast are night and day from the forums,but that still shouldnt discourage from being involved everyday There is plenty of free content on here blogs guides etc. Theres no pressure to be a pro member there is just more perks involved,I have been a pro member and when times get tough I dont renew no big deal I still learn and have connected with plenty of people. You kind of have a understanding of how things work now. I havent done deal yet but I look at this way if you can make it here you can make it anywhere lol.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes6y
@Jennifer Ryan you wrote
The podcasts makes it sound great
Now it only seems like a big advertisement to get people to pay for pro. and nobody is honest about it because everyone is trying to get aproval and be a part of the teamI think @Scott Kimberly comment is right on. It is only natural that people on the podcasts certainly want to come across in a positive way and make themselves look good. Many also have an agenda to promote themselves or their business.
People here in the forum may also have an agenda of their own. But I don't know what you mean by "Nobody is honest" or to be "Part of the team" I come here to help people and if you want honesty I do it for selfish reasons. It makes me feel good that people respect me and look up to me.
This is a public forum. You are going to get good advice, some bad advice, and some well intended but misguided advice. You are also going to read comments that are positive and uplifting or some that are condescending and rude. Some of the best advice you will get here, (or anywhere else in life), is advice that is unpleasant to hear. That is the nature of a forum.
It is your job to evaluate the credibility of the posters and to choose what to absorb and what to ignore. That isn't just true here but any place elsewhere on the net.
Good luck, were here to help.
- Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes6y
Originally posted by @Jennifer Ryan:
Scott Kimberly.
That's for sure. I've been trying to see if it's worth it all the hype.
I can get all the information on here by searching the net and it's less cumbersome.
The podcasts makes it sound great
Now it only seems like a big advertisement to get people to pay for pro. and nobody is honest about it because everyone is trying to get aproval and be a part of the team.So maybe if I get Pro, have 100k or more posts own 50 houses, 200 apartment units with at least a few million in the bank. Then maybe there would be some approval.
The podcast is very inspiring but this forum makes me not want to listen to the podcast anymore and I've been listening for years to Josh Dorkin and Brandon Turner and just as I was about to type Mindy Jenson. Mindy herself tells me I'm in the wrong forum when I thought I clicked on the section for this discussion and that my post will be removed.
I don't know what to say about that but this forum has changed my opinion of Bigger Pockets
no need for “pro”.
- Member since 2019 · 18 posts · 4 votes6y
Cody L. " No need for pro"
Wasn't expecting that.
Thank you
- 6yDaniel DietzPro MemberRental Property Investor · Reedsburg, WI · Member since 2011 · 1k+ posts · 857 votesI guess part of it is what you put into it too. I/we have learned TONS on here, and in my thoughts MUCH easier than just searching the web.
For example when I was researching SDIRAs and SOLO401Ks almost 50% of the google searches directed me to BP, which says something about the site. I search and consumed everything I could on that subject, found some GREAT 'providers' who took time to answer newbie questions even though they can not directly promote themselves, and eventually picked one to use and it has been great.
The same goes on 1031s that I will be involved in the near future. There is no way to get the guidance off the web that I have got here to help understand things.
I just hit over 1000 post and 500 votes. As I thought over that when I first started I was asking LOTS of questions. Now I probably answer more than ask, and that TOO helps me clarify my own thinking on a subject as I answer.
The Forums are not some 'magic pill' that solves problems, but it can be part of a balanced diet of real estate information :-)
To me the biggest benefit of the Pro is unlimited use of the calculators ( I probably use 5-10 times a week at least). Invaluable for looking at deals, thinking of refinancing etc....
Dan Dietz - Member since 2019 · 18 posts · 4 votes6y
I got a bit of a back lash on my post for going on Bigger Pockets and asking about private equity lenders.
I was told by a few people Private lenders are only people you know personally.
Yet I had read a Bigger Pockets article posted by Ankit Duggal, Sept 14 2019 called: Private Money Lenders: Who They Are & 3 Feasible Ways to Find Them.
It mentions The 3 Private Money Lending Circles.
1.Primary circle : friends and family.
2. Secondary Circle: Friends and colleags of friends.
3. Third party circle: Investers you don't know yet.
It's worth a read.
So who's right?
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes6y
@Jennifer Ryan I usually say that private lenders are just that, private. They lend to you because they know and trust you. That is different than Hard Money Lenders.
Many people consider hard money lenders, "private lenders". There is a significant difference. A hard money lender is a professional lender who is regularly in the business of lending to multiple investors.
A private lender often only lends to you or very few people. They are not professional lenders. They don't look at their lending as a regular business.
I took the time to read Ankit's blog post. Yes it is very good. I can see why you wold be confused. Like many things there is a gray area. His circle 3 contains people you don't know, so how could they be private by my definition? He says, "but it takes the longest to convert them into capital partners." The reason he says that, is because these people need to get to know you enough to build a relationship with you so they trust you.
This is a part many new investors miss. It can take long time, even for family and friends, to warm up to the idea of lending you money. This is going to be especially true of people in Ankit's 3rd circle.
I hope the above helps make it more clear. But keep in mind, there is no strict definition of private lender. You are not going to find in in Websters dictionary. As I said above some people call hard money lenders, private lenders. I see a clear distinction.
As I said in my previous post, you are going to get some good information and some bad information here. That can happen even within one post. Ankit Duggal is a very smart and credible guy. He has been writing for Bigger Pockets for years. Yet I would caution you about his post. He mentions mailing lists to find private lenders in circle three. Advertising for money is a serious No No. This could get you in trouble with state or federal securities regulators.
Nobody knows everything, and nobody can fit everything they know into one post. You need to filter what you hear, read and see, to discern what is right for you.
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