Want to know how to raise money from lenders? There are a number of ways to fund your real estate deals. So what are the options? Why are private lenders so important? How do you get them to provide the financing you need?

Options for Funding Your Wholesale Real Estate Deals

Conventional Banks & Mortgage Lenders

Regular banks and mortgage lenders may be a source of funding for your real estate wholesaling deals. They can offer a substantial source of capital. However, they are typically slow moving, have hefty credit, income, and paperwork requirements and quirky underwriting procedures, and often won’t fund distressed properties.

Hard Money Lenders

Hard money lenders are a common alternative stop for investors seeking faster closings, and funding for properties which don’t fit the conventional mold. These lenders may fund properties in need of rehab work, and they may close faster than your main street bank. However, they often demand significant cash skin in the game and may have experience, credit, and asset requirements which aren’t a fit for all investors.

Transactional Funding Lenders

Transactional funding was created especially for real estate wholesaling. These lenders will provide flash cash, and ‘dough for a day’ so that wholesalers can complete back to back closings. The requirements can be minimal, and 100% financing is often possible. The one catch is that you’ll already need to have a qualified end-buyer under contract before being approved for funding.

Other Financing Options

Many real estate wholesalers overlook alternative funding sources that they have available to them. This can include existing IRAs or 401ks, business lines of credit and working capital loans, as well as tapping existing equity, friends and family. These are all good resources to at least have on the sidelines.

Private Lenders

Private mortgage lenders offer wholesalers an exciting alternative. Private money lenders have the freedom to make their own common sense rules for lending, and by using them wholesalers are providing a service to other individuals and families who need safe investments, and a better return on their money than they are getting elsewhere.

To learn more about locating Private Lenders near your area, Click Here!

The Advantages of Private Lender Financing

There are many advantages of using private lender financing for real estate wholesale deals:

Faster Funding

Wholesaling real estate is all about speed. It’s about being able to close on deals fast, and flip them fast. If your private money lenders can help you fund and flip in 7 days instead of 3 weeks, you can do 3x the deals. There’s less time for deals to fall apart, and more negotiating power for securing deeper discounts.

Few Hoops and Qualifications

Private lenders don’t have lengthy underwriting guidelines or quirky underwriting demands. That makes wholesaling and using leverage far more efficient and profitable. It also means being able to count on your deals closing, rather than applying and just hoping it goes through. With many lenders in this class not even asking for credit, appraisals, or proof of income, far more newer investors can take advantage of this financing.

Flexible Terms and Funding Arrangements

Conventional loans are clearly not designed for house flippers or wholesalers. Private lenders aren’t subject to the same regulations, bosses, or to creating packages of loans to sell in the secondary market. These loans can be tailored so they make sense for your business model.

Savings on Rates and Lender Fees

Hard money lenders may offer flash funding, and institutional asset based lenders may offer more investor friendly loans, but they aren’t always cheap. Most lenders charge hefty fees, require a variety of third party vendors to be used, may have prepayment penalties, and bump up their advertised interest rates for investors. When calculating the true net borrowing cost, private money can be far more profitable.

Unlimited Borrowing Potential

Private lenders offer unlimited deal potential with no cap on the number of loans you can have out at any given time.

Value Beyond the Money

Using private lenders provides a valuable service to others, versus borrowing from the bank. You are helping other individuals and families to enhance their finances, cover college tuition, achieve retirement, and give back to their communities.


Yes, private mortgage lenders will fund investment property deals for wholesalers with bad credit. In fact, many of these private money lenders may not even request your credit report. They are in the ‘asset-based’ lending business, and the ‘business loan’ business. That means they want to know the deal is good, a typically loan based on the opportunity, not you as the individual investor. Some will have a system. While others you may get funded with no credit, poor credit, past bankruptcy, and previous foreclosure. That means financing is no longer an excuse or roadblock to getting started and scaling your wholesaling business.


So how do you get a private lender to ‘buy’ a house?
How do you get private money lenders to buy into your deals and provide funding, and perhaps even buy the home for cash themselves?

It’s all about the numbers. If the numbers work, and you have a real deal, then you’ll find a private lender eager to finance it. If the numbers are that good, they might even buy it and hold onto it as an investment.

Of course it is also about relationships and marketing too. There are many capital rich investors out there, but they are looking for investors they can trust and build an ongoing partnership with, and they have to be convinced that you can deliver on what you say.

The right introductions and good presentations can make a big difference, especially when approaching new private lenders for the first time. You need to know what is important to them, what level of detail they expect, and how to build credibility. Some wholesalers can achieve this with a simple email, others utilize professionally designed credibility packages and PowerPoints.

Typical factors private lenders will want to know include:

Property address and location

Where is the property located, what will their funds be used for?

The loan amount requested

How much do you want? Tell them how much you need to make it work.

The purchase price

How much are you actually paying for the property? What number is on the contract?

The LTV, As-Is Value, and ARV

How much does your loan amount represent in loan-to-value (LTV)? How does it compare to the current as-is value of the property? How about compared to the potential after-repair-value (ARV)?

Length of loan term

How long do you need the money for? What time frame are you most likely to pay it off in? What terms do you want in the loan agreement just in case it takes longer to flip than you think?

Proposed rates

How much interest are you willing to pay for the money? Are you willing to pay any points? Paying points means that you pay the private lender a certain percent of the loan when it closes. If you agree to 2 points on a $100,000 loan you are paying the lender $2,000. What will they make in returns?

Rehab or repair costs needed to achieve the ARV

What needs to be done to fix or improve the property? Who will do this work? How much will it cost? What are you basing these estimates on?

Any experience you have or system you are using

Lenders are more confident in lending when you can show a track record, or at least a proven system for investing in real estate profitably. What can you show?

What your game plan is

What is your game plan for this property? What are your exit strategies? What is your timeline? Where are you at in the process right now?

Ways of Finding Private Lenders


Real estate coaches, attorneys, financial planners, agents, and bankers can all be sources of referrals to private money lenders.

Networking at Industry Events

Real estate investment clubs, networking events, seminars, and tradeshows can all be fantastic places to run into private money lenders.

Converting Friends and Family into Lenders

You’ve found a great way to profit from real estate, why not share that prosperity with those you love and care about? The banks will be okay without your interest and loan fees. Your friends and family will get far better returns on loaning you their savings versus having it in the bank too. Create some win-wins, and share the gains.


Hit the web and search for private money lenders in your area.

Newspaper Ads

Private lenders will sometimes advertise in local newspapers and community papers. Keep an eye out for them.

Using Software to Acquire Lists of Private Lenders

There are millions of individuals out there who could make great private lenders, and who could be well served by working with you. They just may not have been turned on to the concept yet. Look for lead lists and software that helps identify prime prospects, and leads you to their contact information.

What wholesalers really need to know about how to raise money from private lenders is that it doesn’t have to be that difficult. Do not fall into the time trap and allow chasing funding to become a distraction and detour which keeps you from getting started wholesaling houses.

If you find the deals, do your numbers right, and can connect with lenders, they will want to put their money to work with you.

The Time Is Now…