Private Money

[Sean Dooley]

I have been searching for distressed properties and have wholesaled some , but I want to start doing my own rehabs but need the funds , I live in southern california where prices are high , so I am going to need funds. what is the best way to find private money lenders ? I am also a contractor and want to do most of the work myself

[Don Konipol]

Google American Association of Private Lenders (I am a member). Lenders subscribe to a code of ethics. At the national convention recently I met a good number of California private lenders.

BTW, the AAPL defines a private lender as sourcing private, not institutional lenders. Some, not all private lenders are hard money lenders. The association would like to phase out the term "hard money" because the meaning of the term has changed. Originally, hard money meant lending on the basis of the hard asset, not credit. The last 10 years have seen the introduction of soft hard money, and most hard money lenders going to some sort of credit basis.

So, we divide the world of lending into institutional and private. Private lenders allow borrowers and properties to qualify for loans that institutional lenders would not lend on. These private loans carry interest ranging from somewhat higher than conventional to much higher, as well as points.

One of the really good thing about AAPL is that we are trying to establish a comprehensive code of ethics for our members. We believe that in most situations the borrower would be better off with lower cost conventional financing and we encourage all borrowers to explore this option first. We lend when conventional financing is unavailable or inappropriate. We offer a niche product, definitely not the right product for most investors, but much needed by a small minority. The lenders of AAPL range across the spectrum of types of properties as well as geographical areas. I believe that this organization is going to be a productive force and I have spent a good amount of money joining, attending conventions, and helping organize.

Please contact me with any questions about this association or about private lending or hard money in general.