Where to Find Private Lenders to Fund Your Investments

by | BiggerPockets.com

Private lenders are everywhere.

A recent study by the U.S. Department of Labor and Training showed that 22% of American workers have at least $100,000 in their retirement fund. With 154 million workers in America, that means more than 30 million Americans have more than $100,000 in their retirement account, being shaken around by the stock market or collecting low fixed returns from CDs, annuities, savings accounts, or other conservative investments.

These individuals are in your grocery line, at your church, part of your local civic club, in your family. Anyone with a good chunk of money tied up in IRAs, savings accounts, or under a mattress could be a private lender.

However, not just any rich person is ideal to work with. You’ll want to find individuals who are easy to work with and understand that there is risk. You don’t want to borrow Grandma’s last dollar.


Related: How I Find Private Money Lenders to 100% Fund My Deals (& How You Can, Too)

How to Purchase Real Estate With No (or Low) Money!

One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.

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How to Recognize Lenders

But how do you recognize these lenders? It’s true, they don’t wear a sign around their necks. Instead, you must let them come to you. Follow this simple three-step process:

  1. Go to where private lenders might be.
  2. Build your brand.
  3. Ask.

Of course, this is easier said than done, so let me expound on it. First, you must go to where private lenders might be. This means getting out there and networking. Attend your local real estate club. Hang out in the BiggerPockets Forums. Attend civic events in your area. Next, talk about what you do. Don’t brag, but simply let your passion for real estate shine through.

And third, don’t be afraid to ask people if they would consider private lending. This is the most crucial part of the entire process, so let’s focus on “the ask.”


Related: 7 Truths About Private Money That Will Help You Raise Capital

Drum Up Interest in Casual Conversation

I previously shared a strategy I like to use: “When talking with people about your business, it’s a good idea to say something like, ‘So, if you know anyone who’s interested in lending on deals like this and working with me, definitely give them my number.’ This opens up the conversation so they can say, ‘You know, I might actually be interested in something like that’ or ‘I know a guy who very well might be interested.’ Either way, the seed has been planted, and you didn’t come across as begging for money—and you may just find some really valuable clients.”

Of course, when you are just starting out and don’t have a brand to build, this can be challenging. You may need to develop that brand first, through partnerships, doing small deals with hard money, or by just becoming the most knowledgeable guy or gal in the room.

[This article is an excerpt from The Book on Rental Property Investing.]

What strategies have worked for you when raising private money?

Share below!

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.


  1. Barry H.

    Good article Brandon, and you are right, lenders are everywhere. I am a private lender and I have lent to friends (carefully) and real estate investors from everywhere.

    The only advice I would give to a newbie or an experienced investor is to KNOW YOUR MARKET and be able to explain why your target property is the best investment (viable sold comps, photos etc). Waaay too many investors come to the table with a property address and sort of ask the lender to figure it out.

    Thanks for posting this article – good info !!

    • Kevin Sapp

      Ditto. I’m a lender in the RTP area and amazing how many folks don’t understand the market, have zero experience, zero contacts and no applicable skills, yet want me to lend them $100K.

      I’ll add, please, please, please, don’t try to BS the lender about how great you are. The guy you are talking to may have 50K in an IRA to invest for the first time or could be a seasoned lender having done $15M+ of transactions using his only his own funds. Most lenders will know your BS within 15 seconds. If you don’t have experience, get a partner, admit it.

      Just like your mother taught you, don’t judge a book by it’s cover. The guy/gal in jeans and a t-shirt could be the lender and the person in the suit driving the fancy car, has nothing but debt.

      Bringing on new lenders can be a hard sell as Brando pointed out, if you land one, communicate, communicate, communicate even if you are seasoned. Nothing impressed me more as a new and experienced lender than a borrower that sends an occasional update, which pictures!


  2. curious to know, what would be the loan terms you usually provide.
    on small unit up to 100k
    I know it varies from one person to another but still, I would like to know the range.

  3. Michele Parker

    That is excellent advise. I am new to business and I have used my own funds to get started. I had heard about finding lenders and I plan to do so in the future but I wanted to go thru this learning process with my mentor and my own dime. You are very motivated when your own money is on the line and that’s how I will identify with my lenders.

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