How Much Money Can Real Estate Investors Get Approved For?

As a private money lender, Real estate investors reach out to me all the time to ask how much money they can get approved for.   The answer is very simple.  Each deal is different.  Maybe $1,000,000 on this deal or maybe only $10,000 on this other deal.

First off, private and hard money lenders are not banks. There’s no DTI requirements, income requirements and it doesn’t matter how many properties you have no your personal credit. None of that stuff matters that much to an equity based lender.  Each deal holds its own weight, it’s self sustained, and it’s treated like an individual business or venture.

The most important thing to think about is, do you have the capacity to make this deal work? Do you have the money needed for monthly interest payments? If you go over your construction budget, do you have the money for that? Do you have the capacity to perform the exit strategy—sell the property at a reasonable price or get long term bank financing in the case of properties you want to hold in your rental portfolio? Can you execute and perform on this deal?  Don't get me wrong, your private lender will certainly make sure you have the means to complete and perform on the project, but they won't require standard banking requirements that prevent most good real estate investors from getting bank financing.

If you’re a newer real estate investor, I would recommend doing one project at a time. Once you are comfortable with the process, you can work your way up to more. These real estate assets can turn into liabilities very quickly if the deal starts going sideways, so be careful when you are first getting started. Take your time, perform, execute, make sure you have the capacity to make monthly payments and to get out of the property, and you’ll be successful.

Also, make sure you do your own due diligence and you know how much the property can sell for or how much you can charge for rent (and get financing on the back end in the case of rentals.