Private Lender Lists
Private lenders are in high demand today. Where can you find lead lists of private money lenders to fund your deals and connect with them effectively?
More and more investors are waking up to the benefits and potential for raising and leveraging private money for real estate deals. While more of it has become available in the past few years, it can seem an elusive source of capital for many investors. Being able to access a list of these potential lenders can be a huge help. So, where do you get them and how do you find the right ones to approach?
Private Money Lenders in the Current Real Estate Market
Private capital has become far more available in the real estate market since 2008. After banks and conventional mortgage lenders cut off the flow of money in the crisis, and began paying virtually net negative returns on deposits, the private money space woke up. Individuals realized they could get a lot better returns by lending directly to real estate investors and businesses, with more safety, while helping others and serving the marketplace better.
At the same time frontline real estate investors realized they not only had few other options, but that private money lenders were a far better option.
There are new loan brokers, conduits, and individuals providing private loans in the market.
The Advantages of Using Private Mortgage Lenders
Once you have a relationship with a private lender the process of funding a deal can be very fast. We’re talking hours or days versus weeks or months. That’s critical for negotiating the best deals and discounts, and beating the competition to signed contracts.
While every deal is unique, and each private lender will have their own preferences, this can be some of the cheapest capital available to real estate investors. It can be a lot cheaper than hard money, and can come with less fees and overall closing costs than more conventional mortgage loans.
Probably the most valuable and important advantage of private money is the flexibility it offers. True private lenders aren’t going to hold you up for repairs or quirks that would completely derail other loan applications. It means you can get deals done you couldn’t otherwise. This can be vital for getting great deals done that others can’t and unlocking some of the best value in the market.
All of the above means investors can have more confidence in getting out there to make offers, dive into due diligence and sign contracts.
How to Market & Close Deals with Private Lenders
Some firms and brokers are out there advertising themselves as private money. Some may be. Others are brokering hard money and institutional capital that is being diverted from past residential home loan lending channels.
Then there are true individual private persons who are active private lenders or are ripe to become private lenders.
They may be reached through:
- Direct mail
- Cold calling
- Hosting local events
- Networking at real estate events
- Email campaigns
- Content marketing
- Social media marketing
- Search engine marketing
For some all it will take is an email or phone call to get things going. Others will require more nurturing and sales. It may require a good PowerPoint, printed private lender package or pitch deck.
How to Find Private & Hard Money Lenders for Real Estate Deals
One way to find them is to go where they are. They may be hanging out at your local real estate investment club or national real estate events looking for people just like you to loan their money to.
Crowdfunding portals have become an interesting way to get deals you’ve got in front of private investors as well. Especially if you have development or commercial property deals. Just know that you’ll probably need a good budget to promote the opportunity, create great materials and handle the legal side of things.
This all makes the most reliable and predictable way to connect with these funding sources as tapping into and building private lender lists. Find software or a database which has the lead on investors who have been funding deals with cash and who might make great joint venture partners or lenders for your deal flow.
Look for those with sufficient capital to easily fund your types of transactions, and preferably who are already comfortable with your locations and property types.