When I'm underwriting a new loan request, this is the order I follow.

#1: Character. Who am I lending to? That matters more to me than the deal itself. If someone doesn't pass the gut check, I don't care how good the numbers look on paper. Real estate is messy. Projects get delayed. Budgets go over. Contractors disappear. Buyers back out. Refinances take longer than expected. When things go sideways, I want borrowers who communicate, are transparent, keep me in the loop, continue making payments, and do everything in their power to make things right. I can work through almost any problem. I can't work through dishonesty or radio silence.

#2: The deal. Collateral. LTARV. Purchase price. Rehab budget. Scope of work. Timeline. Exit strategy. Borrower experience, credit, and reserves. Knowledge of the market they're investing in. Their team. Whether they've successfully executed this type of project before. And perhaps most importantly, if things don't go according to plan, do I still feel protected?

I'm a private lender. I work with a couple handfuls of capital partners who trust me with their hard-earned money, and I invest my own money into every loan I fund as well. I'm not institutional capital and I'm not chasing volume.  At the end of the day, I'm lending to people, not properties. The property is my collateral. The borrower is my investment.

If you are a TRUE private lender, I'm really curious to hear your thoughts on this as well.