No bank? Here's how private lenders fund real estate deals and what they look for. Talk to an investor-friendly agent on our team, free:
Brian Miles and Adam Hobson break down how private lending works in real estate and how investors use private money to buy and fix houses without a bank. They explain how hard money loans work, including six-month terms and upfront points, how private lenders protect themselves with a title policy and a first lien on the property, and why many lenders want to know both the borrower and the house. They also share where to find private lenders, why you should tell people what you do instead of asking for money, how rehab draws work, and how to become a lender yourself with a self-directed retirement account.
If you have found a good deal but do not have the cash or the bank approval to buy it, this is the episode.
WHAT WE COVER 0:00 What private lenders look for 1:43 What private lending is 2:50 How hard money loans work 10:02 How lenders protect their money 13:30 Why lenders want to know you and the house 16:40 Where to find private lenders 20:09 Tell people what you do instead of asking for money 22:56 How rehab draws work 25:53 You don't need a lot of money to become a lender
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COMMON QUESTIONS FROM THIS EPISODE
Q: What is a private money lender in real estate? A: A person, not a bank, who lends money for a real estate deal, usually at a higher rate for a shorter time. Private lenders often move faster and ask for less paperwork than a bank, but they want to know you, the property, and the plan.
Q: How do I find a private lender for real estate? A: Start by telling people what you do, not by asking for money. Family, friends, coworkers, and people at local real estate meetups often have savings earning very little. Do a few deals well and word spreads. Put every loan in writing and record it against the property.
Q: What interest rate do private lenders charge? A: It varies. Adam has always offered 12%, and at that rate he rarely has trouble finding private money. Hard money lenders often add points, a percentage paid upfront. Two points on a $100,000 loan is $2,000 at closing.
Q: How do private lenders protect themselves? A: They record the loan so they are the first lien holder, get a title policy, and only lend where the numbers work even if they have to take the house back. During a rehab, they pay out money in draws and ask for photos of the finished work.
ABOUT THE SHOW The Evernest Real Estate Investor is for people who own rental property, or want to. Spencer Sutton and Adam Hobson break down buying, financing, managing, and scaling single family and small multifamily rentals, with real numbers from a company that manages thousands of homes. New episodes weekly.
MORE FROM EVERNEST @doorsfromadistance, Matthew Whitaker buys rental houses in markets he has never set foot in, every number on screen @evernest1, for rental property owners, hosted by Evernest founder Matthew Whitaker @evernestpropertymanagementshow, for property management company operators
Evernest manages thousands of single family and small multifamily properties for over 9,000 owners across 50 US markets. Learn more:
Nothing in this episode is legal, tax, or investment advice.
#realestateinvesting #privatemoney #hardmoney
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By: The Evernest Real Estate Investor Podcast Title: How to Find Private Lenders for Real Estate Deals Sourced From: www.youtube.com/watch?v=yGdf5yp1z9Q
