How to get the most out of your private money lender.
Real estate investors turn to private money loans or hard money loans to solve several issues that can make getting a loan tough – both borrower issues and market issues. I covered common borrower issues that can be solved by hard money loans in my last article. If you missed it, click here.
If you’ve determined that a private money loan is the way to go on your next project you will next need to find potential lenders, narrow the field and submit your project to the top contenders. Just like most businesses, there are many private money lenders and hard money lenders to choose from. To help you select the best private money lender for your project, I’ve compiled a list of things you should look for:
- Speed: Especially in this market you need someone to move quickly so you don’t lose out on an opportunity.
- Creativity: A willingness to work through unique problems rather than rejecting your application if the project doesn’t fit nicely into predetermined requirements.
- Real estate expertise: Someone who understands the market and knows a good project from a bad one rather than taking a purely finance perspective.
- Local market knowledge: Every market has local nuances and working with someone who knows and understands these can help ensure the best outcome and give you access to local resources.
- Sound underwriting: While this might sound like a lender requirement, as a borrower you want to work with a company with sound underwriting and risk management. Why? Lenders want to work with top notch companies which means you get access to a pool of the best lenders and the company is likely to be around for future projects.
- Portfolio of successful deals: Again, this might seem like more of a lender requirement but a company that has a portfolio of successful deals demonstrates their ability to find lenders and borrowers and loan on the best projects.
- Repeat customers: Nothing says success like repeat customers so look for someone who has this track record.
Get more tips on selecting a private money lender by downloading our Borrower’s Guide to Private Money Lending. Click here to download your Borrower’s Guide.
Do you have a project that needs Private Money financing? If so, please drop me a line! We’re ready to lend and help you grow your business.