Experienced Private Lender – Struggling to Find Borrowers Lately

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Experienced Private Lender – Struggling to Find Borrowers Lately

Joe Grespin
Rental Property Investor · Member since 2018 · 70 posts · 38 votes

Hey everyone,

I’ve been in the private lending space for a while now, mostly focused on short-term deals like fix and flips and bridge loans. I’ve had some solid borrowers in the past, but lately it’s been tough finding new deals that make sense — or even hearing from serious borrowers at all.

I’m curious if others are seeing a slowdown on their end too, or if maybe I need to adjust how I’m getting in front of folks. I’ve always relied on referrals and repeat clients, but that pipeline seems to be drying up this year.

Not here to pitch anything — just genuinely looking to connect and swap notes with other lenders (or even investors) to see how you’re staying active and protected in today’s market.

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Lynne D.
Member since 2023 · 16 posts · 7 votes
1y

I think part of it too is that real estate investors are struggling as well. We may have excellent deals, but because of the not so good credit or lack of cash or both we can't get the time of day. I have 4 such deals that I'm having trouble getting funding for those reasons. Also, there seems to be significantly fewer actual private money INVESTORS. The vast majority of people calling themselves private lenders are really masquerading as HMLs with their very similar underwriting criteria and loan fees. A true private investor is just a person (or a few people) who just want to put their capital to work for them. There are no underwriting criteria in terms of minimum credit score, minimum cash balance, loan fees (org fee, doc fee, legal fee, processing fee, etc.). They are just regular people who look at the deal and simply decide it they want to do it or not. A sample deal would be a fix n flip SFR where the purchase, rehab, title co fees, insurance, etc. is $90,000. ARV $150,000, more than enough profit to split on the back end or pay a set effective interest rate. I personally pay my investors 20% ROI or 50/50 split on the back end, whichever is higher. They don't ask for my credit score, bank statements, make me pay for an upfront appraisal (comps are fine), or require a down payment. They don't even require monthly payments, which is another deal stopper for some investors. I looked up that the payments can be part of the loan if the lender allowed them to be. So the true private investor simply invests the $90k and gets back the $90k plus 20% or 50/50 split of the profit. They will talk to me to make ensure my experience, make sure I'm knowledgeable, have my contracting team in place and can get the job done and do whatever due diligence they want on the actual property, but it's all pretty simple and easy. I get there are lending laws (which are a lot more flexible for business to business than business to consumer), and I also get there are risk factors of foreclosure. But I think part of your problem is the criteria is so stringent to mitigate the risk very few deals or borrowers qualify. So it's not so much that there's a shortage of deals or borrowers, just lack of creativity on the lender or broker part to make a good deal work. So a borrower has to find a private INVESTOR for the first few deals to build up cash and maybe fix the credit, then they can qualify with a typical lender after that. But as I said at the beginning, borrowers are struggling too and since private INVESTORS seem to be in few supply these days, they can't find funding for their excellent deals to climb that lending ladder. Sorry for the long post!

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y

    Just have to market your services. 

    Are you a direct private money lender? Or broker? 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
    • Joe Grespin
      OP
      Rental Property Investor · Member since 2018 · 70 posts · 38 votes
      1y
      Quote from @Erik Estrada:

      Just have to market your services. 

      Are you a direct private money lender? Or broker? 


       I am a broker, it seems I keep encountering a lot of people that seem like they're in need of funding but after talking a while it is revealed that they are also a lender. 

      0Reply
    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      1y
      Quote from @Joe Grespin:
      Quote from @Erik Estrada:

      Just have to market your services. 

      Are you a direct private money lender? Or broker? 


       I am a broker, it seems I keep encountering a lot of people that seem like they're in need of funding but after talking a while it is revealed that they are also a lender. 


       I see now. Honestly it seems like co-brokering and being hyper specialized in a niche really helps in a market like this. Majority of the deals I am doing are very out of the box or come from brokers that fell out. 

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
      WebsiteView Page
      1Reply
  • Patrick Roberts
    Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
    1y

    The markets in both Louisiana and SC seem to have frozen in the past few months. Most deals just dont pencil and buyers have pulled back. 

    Lots of saturation with lenders is compressing pricing, also. I've seen a lot of loans in the past six months that just do not make sense. 

    1Reply
    • Joe Grespin
      OP
      Rental Property Investor · Member since 2018 · 70 posts · 38 votes
      1y
      Quote from @Patrick Roberts:

      The markets in both Louisiana and SC seem to have frozen in the past few months. Most deals just dont pencil and buyers have pulled back. 

      Lots of saturation with lenders is compressing pricing, also. I've seen a lot of loans in the past six months that just do not make sense. 


       Totally, I think it's not just Louisiana or SC because I've been feeling the same in CO and OH. I think it all just boils down to there are more lenders than borrowers. 

      0Reply
  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    1y

    Maybe Post in the Classifieds?

    0Reply
  • Brian Marston
    Member since 2024 · 10 posts · 2 votes
    1y

    What states are you looking to lend in? I have several deals I am seeking financing for in Delaware. All are 'fix and flip deals' with huge upside potential. If interested in discussing further, please reach out. 

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Joe Grespin:

    Hey everyone,

    I’ve been in the private lending space for a while now, mostly focused on short-term deals like fix and flips and bridge loans. I’ve had some solid borrowers in the past, but lately it’s been tough finding new deals that make sense — or even hearing from serious borrowers at all.

    I’m curious if others are seeing a slowdown on their end too, or if maybe I need to adjust how I’m getting in front of folks. I’ve always relied on referrals and repeat clients, but that pipeline seems to be drying up this year.

    Not here to pitch anything — just genuinely looking to connect and swap notes with other lenders (or even investors) to see how you’re staying active and protected in today’s market.


     We are still seeing good deal flow but it also gets masked by the number of people who think they can get 100% financing and reach out and are asking for terms that do not exist. 

    7e investments53 Reviews
    WebsiteView Page
    1Reply
  • James Blair
    Investor · Northern NJ · Member since 2022 · 30 posts · 7 votes
    1y

    I am a private lender in northern NJ and still seeing a significant amount of deal flow but most of that is from my existing partners. Most of the new stuff doesn't meet my requirements.

    0Reply
  • Jeffrey BlackmanPro Member
    Lender · Chicago, IL · Member since 2017 · 107 posts · 34 votes
    1y

    I'm a broker and deal flow has slowed down, but is ok. Like @Chris Seveney, I have also seen an increase in the number of people asking if they can put 0% into a deal.

    1Reply
  • Scarlett Lerperger
    New to Real Estate · Gainesville, FL · Member since 2018 · 5 posts · 1 vote
    1y

    I have a deal that I am looking financing for 24 months in Florida . If this something you may be interested, please reach out to me 

    0Reply
  • Lynne D.
    Member since 2023 · 16 posts · 7 votes
    1y

    I think part of it too is that real estate investors are struggling as well. We may have excellent deals, but because of the not so good credit or lack of cash or both we can't get the time of day. I have 4 such deals that I'm having trouble getting funding for those reasons. Also, there seems to be significantly fewer actual private money INVESTORS. The vast majority of people calling themselves private lenders are really masquerading as HMLs with their very similar underwriting criteria and loan fees. A true private investor is just a person (or a few people) who just want to put their capital to work for them. There are no underwriting criteria in terms of minimum credit score, minimum cash balance, loan fees (org fee, doc fee, legal fee, processing fee, etc.). They are just regular people who look at the deal and simply decide it they want to do it or not. A sample deal would be a fix n flip SFR where the purchase, rehab, title co fees, insurance, etc. is $90,000. ARV $150,000, more than enough profit to split on the back end or pay a set effective interest rate. I personally pay my investors 20% ROI or 50/50 split on the back end, whichever is higher. They don't ask for my credit score, bank statements, make me pay for an upfront appraisal (comps are fine), or require a down payment. They don't even require monthly payments, which is another deal stopper for some investors. I looked up that the payments can be part of the loan if the lender allowed them to be. So the true private investor simply invests the $90k and gets back the $90k plus 20% or 50/50 split of the profit. They will talk to me to make ensure my experience, make sure I'm knowledgeable, have my contracting team in place and can get the job done and do whatever due diligence they want on the actual property, but it's all pretty simple and easy. I get there are lending laws (which are a lot more flexible for business to business than business to consumer), and I also get there are risk factors of foreclosure. But I think part of your problem is the criteria is so stringent to mitigate the risk very few deals or borrowers qualify. So it's not so much that there's a shortage of deals or borrowers, just lack of creativity on the lender or broker part to make a good deal work. So a borrower has to find a private INVESTOR for the first few deals to build up cash and maybe fix the credit, then they can qualify with a typical lender after that. But as I said at the beginning, borrowers are struggling too and since private INVESTORS seem to be in few supply these days, they can't find funding for their excellent deals to climb that lending ladder. Sorry for the long post!

    2Reply
  • Frankie VozziBusiness Member
    Member since 2025 · 345 posts · 86 votes
    1y

    Joe, a lot of lenders have been feeling that shift this year. Fewer "easy" deals are circulating, and many investors are being more selective with projects. What's been working for us is staying visible in the investor communities where borrowers are still active (networking groups, BiggerPockets, REI meetups), and offering flexible products like DSCR loans or bridge loans options alongside the traditional fix & flip.

    It keeps the pipeline more consistent and helps match with investors who might not fit the standard short-term mold but still have solid projects.

    Curious, have you tried pairing up with any investor-friendly brokers or teams recently? Let's connect!

    [email protected]516-888-7750
    0Reply
  • Doug SmithPro Member
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    5mo

    I know this is an old post, but it's still relevant 11 months later. Volume does come and go. We started private lending during the last crash after I left banking and the thing that I didn't think would be a big deal when we started was the balancing act between deal flow and capital on hand. We either seem to have too much of one or the other. It's easier if you have a line to use, but it's still really hard. We started to solve that issue by hooking up with other small-to-mid-sized lenders to say "hey, we're light on liquidity but we've got a great deal" or "sure, we've got extra capital". We either broker to or take brokered deals from other lenders. We had a couple that just said "I've got capital, but you guys deploy it". Yes, we've seen a significant slowdown on good deals, but making those relationships with small-to-medium-sized capital providers and lenders has really helped with that issue. I hope all is well with you and your practice and that you've found that balance in the last 11 months. 

    0Reply
  • Lee Burns
    Investor · Chicago, IL · Member since 2018 · 313 posts · 149 votes
    5mo

    I've recently decided to pivot from being hands on to more of a PML.  I get a lot of people reaching out to just kick tires.  I'm working to market myself and services better to attract more and higher quality borrowers

    0Reply
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