All Forum Posts by: John B.

Hard Money is a real industry.  Now, does that mean there are phonies out there looking to collect upfront fees then ghost, sure.  That's any industry.

Hard Money is like a firearm, when used correctly by trained personnel it gets the job done, and done well, but when used by some cowboy who doesn't understand what they are holding, it can go sideways, especially some lenders DO NOT do closing funds check on borrowers which I think is crazy.

I've put together 40+ deals, and have brokered 100s more. I also get intel from the Seminar circuits and the conventions as my friend is a Senior L/O for a huge Hard Money company and he gets sent everywhere for them and his lender has lots of deals with those RE bootcamps where investors learn how to BRRRR and he sits in on all the lectures and we make notes.

There's a clear cut way to do this well, there's no doubt.  A big part of it is property sourcing.  You need to be a cash buyer who is an advantage buyer.  Foreclosures, Owner needs to get out, vacant for years, auction, short-sale, some wholesale but be picky.  You buy for cash at hopefully 60% - 80% of the market price.  Then you have 4 choices of exit:

1) Sell as-is for a profit.  You don't touch a thing.  You bought this property for 75k and someone on day one wants to give you 110k for it.  It isn't something you'd like to keep based on area, house type, parking, whatever and you can just make a private sale and make a 40% return in a few months.

2) Do a very light rehab and list it to be someone's rental purchase.  You're not gonna want to keep it, but someone else will because it should cash flow ok.  So you do a rental quality finish and then put it on the market.  Maybe 20k - 30k.  New floors, paint, redo the kitchen and bathrooms.  Now you get to list this for like double what you paid for it cause a portfolio building investor will come along and gobble it up.

3) Do a flip finish and put it up against the highest comps for the high return.  You go to a lender, and now you use Hard Money.  You cash out of the property and also ask for the rehab funds needed.  You go into an interest only bridge loan for like 6 months until the project is done and then list, hopefully it sells in month one.  But this is the biggest short term windfall.  B/C you started ahead of the game by purchasing under market.  So where the investor in option 1 enters at 110k and puts 80k in, you entered at 75k, and put 80k in.  His project cost is 190k, yours is 155k.  He really wants to sell at 280k but he'll have to sit maybe and catch the right buyer.  You can list the house for 260k and make more than him.

4) Do a nice rental finish and put it in the portfolio.  You like it, you wanna keep it.  Go to the lender, do the bridge loan with rehab, but when done get a renter and then refinance.  But only take what cash you have in, leave the rest in the house and keep the mortgages low and cash flow high.  Again, your mortgages will be way cheaper than the investor in option one.

Most of us are the investor in option 1, you gotta be the game master in a sense, not a player.  Cause I tell you, when you are the investor in option one buying at market or near market, when things go bad....your safety net shrinks up real fast.  When you are the game master with all 4 exit plans in place, getting stuck is not a thing really.

I just bought a property at Auction for 40k on Monday, plan is to sell it to a wholesaler for like 65k and they will offload for 70k - 75k.  But eventually you need to be playing in all the steps.  That's the goal, be burning and churning so many properties that you are exiting at every step all the time.

Hi BiggerPockets community!

I’m excited to make my first post here. While I’m new to the community, I’m definitely not new to real estate—I live, breathe, and love it! I’m looking forward to connecting, learning, and growing together.

My background is in SFR and long and mid term rentals. I've built a rental portfolio and managed every aspect from acquisition to property management. Recently, I discovered a significant demand for mid-term rentals in a particular Michigan market, particularly from highly qualified traveling professionals (not just nurses!). The demand far exceeds supply, and I've had to turn away weekly requests for the past three months now. This is an opportunity I'm eager to seize, but I need to expand my network of private money lenders or equity partners to make it happen.

Currently, I work with private lenders who fund down payments in exchange for monthly payments until they’re paid back from cash flow (12-24 month terms). The returns are great, and my investors love working with me—but they’re all tied up in existing projects, including a major flip. I need to connect with more private lenders for 12-24 month loans, typically $20K-$40K per property, with purchase prices ranging from $110K-$160K. Facebook groups have been full of scams, and my personal network is currently tapped out - but the opportunities keep coming in and I hate to watch them keep leaving! Any recommendations on where to meet trustworthy private lenders that want a good and safe investment and stay removed from property management themselves? This is truly just a small loan. My current investors roll their money right back into my next projects but as I've stated, I've hit my ceiling with them and need to expand this network and these opportunities to others but I am stuck on where to meet more people!

My second question involves apartment building syndication and financing. I’m negotiating an off-market deal for an 11-unit property with value-add potential and room for additional apartments. The purchase price is $1.6M, and I’m looking to raise the down payment through partners. I’d run the entire project and handle property management, offering investors a preferred return and possibly additional incentives. I’d love advice, recommended podcasts, or insights on syndicating and financing my first multifamily deal. I’m working on a Letter of Intent with a commercial broker and leaning heavily into the wisdom of others with experience in this space. 

Thanks in advance for your insights and support! I’m looking forward to connecting with like-minded investors and building long-lasting relationships. I am all for mutually beneficial deals and partnerships.

Amanda Rechsteiner Realtor & Real Estate Investor

Get the book: "Lend to Live" here on BP in the Bookstore.

Find a local experienced lender to partner with. Doesnt have to be some formal JV deal where you combine funds, but someone who will share risk with you in individual deals and help you with underwriting, credit analysis, and processing.

Lending is a skillset, and there's a lot that goes into underwriting a deal and preserving your capital. 

You wont need to do a ton of marketing with the amount of capital youre starting with. Your capital will be deployed with 1-3 loans, so unless you plan to have another outlet (like brokering to other lenders), that part can wait until later. 

You'll want to dig deeply into how you set up your banking. A lot of financial institutions do not allow lenders as customers and will close/freeze your accounts if youre lending out of accounts under the guise of a different business line. You should be able to order and send wires in under 24 hours with whatever institution you choose. 

There's way too much to cover to type it all out here. Youre best bet is to partner with someone local to you who is experienced and can guide you along the path with this. You'll definitely want to find a good attorney partner who can review title work and commitments/policies at the very minimum. Geraci will be able to draft your loan docs, but I dont know if they will review title - I've never tried that part with them. Jeff Watson is an attorney in Ohio who specializes in private lending, and some of his content would be a good resource for you. Hard Money Bankers has a great podcast for private lenders as well. 

Really enjoyed reading your post — sounds like you're being thoughtful and doing your homework, which is huge. 

I’m a private lender and broker myself, and honestly, your conservative approach (entity-only, 1st liens, solid underwriting, etc.) is exactly the kind of foundation that sets you up for long-term success. Most of the lessons you’re anticipating—like managing idle capital or balancing reputation with limited funds—are spot on.

For liquidity, I’d look into high-yield business savings or money market accounts with same-day transfer capabilities. A few online banks are great for this. As for reputation while working with a smaller capital pool, transparency helps a lot—position yourself as a relationship-based boutique lender who funds quality over quantity. That actually appeals to many investors.

When it comes to reviewing deals, here’s what’s helped me:

• Start simple: I ask for the basics upfront — purchase price, rehab budget, ARV, and timeline. I want to see how they got their numbers (comps, scope of work, etc.) to see if they've done the homework or are guessing.

• Borrower & exit plan: I pay close attention to the borrower's experience and how they plan to exit. Even if they’re newer, if they’ve got a solid contractor, agent, and some skin in the game, I’ll consider it.

• Keep it within your LTV comfort zone: I personally don't go above 65–70% of ARV. If it's a heavy rehab or a tight deal, I either pass or structure it with a smaller draw to start.

• Protect your downside: Get yourself on the insurance, confirm the entity setup, and don’t skip verifying basic things like ownership and reserves. Your instincts will get sharper with every deal you look at. 

You'll definitely learn a ton just by walking through a few deals. Trust your gut — if something feels off, it usually is. And don't rush into funding something just because the borrower’s in a hurry

Also — I highly recommend getting plugged into your local investor community. Even just one good private lender or investor in your area can be a huge resource (or even a future partner). People are often more open to teaming up than you’d expect.