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Keith – if you are still looking for a list of private money lenders, then I think you missed the point of this article 🙂
Well done, informative for beginners like me- thanks Nathan
Thanks, Nathan!
Like most wannabe investors out there I thought that Private Money meant money from any source except the institutional lenders. Your comments are clear and to the point and will certainly help to disabuse many of their misconceptions of private money.
Many make that mistake, Leslie!
Thank you, Daniil,
This was great of you to take the time to explain, very well, the difference between the lenders.
I am glad you found me originally; I purchase Rehab Valuator and Rental Valuator.
Glad you found us as well, James and thanks for your business!
Daniil: well written blogs like this are valuable. You hit on all of the very important points that many investors don’t understand. By giving examples of what NOT to say and what TO say in its place you will have saved a number of people from meeting those nice, no nonsense people from the local SEC offices.
Thanks for taking the time to write the blog.
Thanks, Kurt! Sometimes know what NOT to say is just as valuable as knowing what to say 🙂
Thanks, Daniil. Your message is clear.
As an investor with a company size of “me,” I have been wallowing around in the private money dilemma for months, reading everything within reach on the subject. Leaving one’s comfort zone is hard enough, but some of the tactics promoted out there make your skin crawl.
It’s a sensitive area — money — and the only loan you’ll get if you come on like an aggressive beggar is maybe some reluctant grocery money from your mom.
Your post spells out the proper strategy. Many aspects of real estate investing require a bold soul to make things “happen.” But I read in your message this is an area where patience, a little organization, and a subtle approach are appropriate.
.
Mitch – it’s not just about being bold but strategic in how you interact with people and build relationships. That’s the key
I have heard your comments at least a hundred times before therefore I can say you are right on target.
I very much agree there are a lot of Hard money lenders trying to say they are private investors.
Outstanding blog, Daniil!
This is the first time I have read the good, the bad and The ugly surrounding This topic.
Thank you for your honesty!!
I wanted your input on a lender by the name of Aurelian.
They offer non-secured signature loans from $500 to $150k.
They charge an upfront one time fee of 15%.
Have you heard any feedback from anyone who has used them?
Thanks in advance.
Joe – unsecured? If it sounds too good to be true, it probably is. And beware of anyone that asks for money upfront before doing any transactions. I’ve never heard of these guys but be careful and do due diligence well before giving them anything.
Good Stuff. Just made investment into the program 2 days ago. Now implementing the program. Great software program. Counting down to cash. Stay tuned.
Glad to hear it, Kelvin! Let’s get that cash rolling in on your end!
Great Blog post Dan. Best and most complete explanation of “Funding” I’ve yet to read!
Thanks, Chaz!
Great article.
Danill, great article! I sent this off to a bunch of folks today who are just in the process of raising some private money.
Have you looked into the Fundrise.com folks out of DC and what they are doing with crowdsourcing?
Pretty exciting to see projects up to $1,000,000 can be run through their program and raise money in small amounts from local investors wanting to invest in their local community etc. It is still just out of the box, but very exciting that they are building the infrastructure to open up investing to the masses and not just the accredited investor.
thanks
jeffrey
Jeffrey – haven’t heard about them, but have started hearing about crowdfunding for real estate deals. Still not sure what I think of the concept.
Thank you Daniil for taking the time out of your busy schedule to give us the great advice/tips/blogs/videos/webinars etc. I bought your Rehab Valuator Premium a few months ago and it is an absolute genius system you came up with Daniil! I use it a lot. Not only did you make this awesome system but the constant emails with the advice that come with being a member are priceless! About a month ago you had a webinar with Mike Nelson for Wholesaling 101 which was great. I signed up for the lead website he mentioned on the webinar & the one you just mentioned above called Listsource.com. I did some marketing about two weeks ago to absentee owners & with the first 100 mailers I received 5 calls. Two of them are very promising. I am now mailing out to them every week which I am sure will yield more results. Daniil I just want to say I can not thank you enough for your continued support & advice you give with such the small Investment I made. That small Investment will pay off a Million fold! You rock Daniil!!!
Fantastic Daniil! I wish I had read this a long time ago. Perfectly laid out to clear up the definition of the different ways to get capital!
I wish I had people sending me multi-family deals on a regular basis.
It seems there is more capital than truly good deals in multi family out there. When they are there I can get money. It’s converse perhaps in single family but I really don’t deal in that space. You have a fantastic resource here and I hope (know) that your readers appreciate your hard work!
All the best
Mike
Thanks, Mike! Definitely tougher to get multi-fam deals these days at any kind of decent cap rates in most markets, my own included. I really wish I had more capital and bought more 2008-2011. I think we’ll all look back and have regrets about not buying more then
Danill, I have a number of good multi’s in the Atlanta and Phoenix area that I have available. If Mike Williams or anyone else is looking for Mulris or are interested in JV in multis drop me a line at terry@turnakeypropertyinvestments.com
Thanks!
Thankyou Daniil, I found your information you sahred interesting and well thought through. You are the first to offer me valid and free advise. If I were not already knowledgeable on how these processes work, I would want someone to say to me what you said in the blog. I am further along though in developing my business and would like to discuss another day what knowledge you may be able to share with me there. I love the software demo and am going to use it in my business somewhere.
Good info, I don’t believe I ever thanked you for the info you put out,I try to read every piece you put out. Thank You! Gives people like me a chance to gain some knowledge in the investing world of real estate.
Thanks, Daniil! Great information!
We are looking for investors, who are looking to invest $k, set back and pull in 10% per on ther
money.
Always excellent information…pointed out some tips I had overlooked. Great value in your blog and in the Rehab Valuator.
Thanks
Great Stuff Daniil! There’s one part missing though, and I’ve had struggles with this myself. When you find a private investor and they are willing to invest with you, how do you handle the paperwork and money portion? I have a private investor that is new, so what paper work should I use to secure him? What do you use between you and your private investors, and how do you handle the money? Thanks again for all the great things you are doing!
Niko – the paperwork really depends on your deal and your state laws. You can you a deed of trust, a promissory note, a joint-venture agreement, etc. There’s no “one fits all” solution
I so appreciate your education and guidance on this subject matter. I look forward to using your software to keep my deals on track but also to build my credibility.
Daniil,
Thanks for the concise info.
Joel
Hi Daniil,
I have been listening to you since I first bought you Rehab Valuator -pro when it first came out. Just read your post and found it to have a lot of common sense. I’m a contractor in New England and I like the simple way you explained lenders. I’m a little set back when there are those that try to make something out of what has been said with a different twist. A little back ground on me; First Mortgage Financing, Construction Financing, Off-Shore Bank and International Financing, Now as far as the SEC is concerned, here’s my take for the industries watch-dogs. They are owned dogs for WALL STREET (the Crooks of modern financing) there the one’s that let WALL STREET run a way with the market and deregulated all the rules and then didn’t know what to do after the collapse. Folks keep it simple or Kiss, Daniil is right find your family, friends and neighbors someone you already know.
Keep it up Daniil,
O and Hugh, I’ll be keeping and EYE on you my good man!
Thanks for your feedback/compliments, Von!
Mr. Kleyman:
A wonderfully written, very informative article. Sharing your expertise is highly appreciated. I have purchased your Rehab Evaluator Software, unfortunately, have not had the opportunity to use it yet. I have a question that I would appreciate your comment or suggestion. Would you/do you suggest placing insurance on a property that you are rehabbing? If so, do you have any companies that you could recommend that is licensed in the state of Tennessee.
Thanks,
James – I usually do ensure the properties that I rehab. There are various ensurance policies you can get for vacant properties undergoing renovation and costs will vary based on level of protection you get. I typically just insure myself against “disaster”, liability in case others get injured on my properties, and a certain amount of theft. But you can get more comprehensive insurance if you’re willing to pay for it. No idea about Tennessee. I recommend finding a good insurance broker in your town who can go out to many different carriers and shop around for the right kind of insurance policy for you
Hey Daniil,
Very imformative blog yet you must know people will continue to ask for your recommendation of private lenders and such, lol. Keep the good information coming. We’re glad to have you.
Thanks, Mary! Yep, I have a feeling I’ll continue to get those requests but I’ll just point them to this blog from now on 🙂
Hi there! Great sight. Here is my problem, all info appreciated. I bought a place using my own money! First wrong step, then came the work. I’m still not done I have 157,000 into it but had bad freeze so had to redo alot. I’m broke sick of even looking at this place need money to finish. I’m still a head . But time wise way behind. Any buyers? Thanks Colleen
Appreciate this post. Will try it out.
Thanks much.i learned a lot even though I had been a realtor over 10years.and I,m tired of Guru lies.
Thanks for the info.
Thank YOU for the best explanation of the financial processes. I have to admit I had totally wrong idea about private lenders. I tough that if you go to special sites like mousetrap etc their lists are alignment. Thanks for honest picture.
Lots of people have those misconceptions, Donna. That’s why I really felt strongly that this was needed to be written down
I’ve come across a lender group with various lending practices and programs. If they offer or accept your deal which they claim as “only if it makes sense” and that’s to “protect you if you don’t know how to recognize a good deal but a bad deal”. One product they offer is a lease back where they use their business credit cuz I have none. Im responsible for the mortgage in their name and I can 1) refined elsewhere after 24 mos or assume the loan and they exit after 12 consecutive pymts both for ordinal loan/ purchase amount. They want 15% of loan price which can be added to original loan. I’m responsible for appraisal etc.
Good deal or bad deal? Or should I research joint venture and see which way to execute???
Does this sound
First let me say that I’m not a financial expert. Also, without seeing all of the fine print it’s impossible to say 100% that this would or wouldn’t be a good deal. However, if you do not have credit, and you have the profit margin built into the deal where you can afford 15% and still make some money then go for it. However, be VERY cautious about all of the terms. Know what kind of loan you would be assuming, know what the payments would be, etc. Make sure you can afford it and be very clear about what happens if you’re unable to meet the terms.
Good job,informative and explained well,Thanks Vince
Thanks a lot for explaining…you’re right a lot of hard money lenders present themselves as private money lenders. I’m working with a private lender now and the deal is awesome, even split! Tried “hard money” and they want like you said some skin in the game. My challenge now is meeting more private money lenders since the one I have now cannot fund all the deals I come across, nut thanks for the tips I can now start to talk to more people I already have a relationship with.
Great job!!! Very simple and informative. Will pass on. Thanks!
Thank you for clearing this up. I had it all wrong. No wonder when ib searched for private money lenders my search was convoluted. Thank you
Glad I could clear it up, Nailah!
Good stuff!
There was a 10 deal cap on lenders that has been changed to 20 for any loans backed by feds.
Daniil,
This blog was excellent….clear, comprehensive, and very much to the point.
I intend to forward it to my agents, to round out their understanding of a complex and very misunderstood topic!
Sounds good, Dennis! Forward it away! 🙂
Daniil, I have been in the RE industry since 1971 and your above advise is right on target.
I am a premium RV and learning to use it more effectively.
Great job!!!
Denis
Thanks, Denis! 1971 – you’ve seen every market cycle imaginable, twice! That kind of experience can’t be bought
Great information!!!!!
Awsome, thanks to all your hard work (and some of my own) I have procured 2 different types of financing options and have been confidently making offers. The information you provide along with the software is invaluable. One day in the relatively near future when I am supremely successful I will thank you in person. From the bottom of my heart thank you and keep it coming. And thanks for sifting through all the crap and as the kids say keeping it real. Sincerely Adam Bailey.
Daniil, as usual your article, is impeccable, with a lot of meat on the platter. I find nuggets, of important, Information, that I can right now.
572.450.6096
Thomas Parker Gist Jr.
Thanks, Thomas! Glad to hear it!
The software is an excellent Realestate tool for investor and wholesaler excellent…
Hi Benjamin,
Thanks! We’ve put a lot of work into it and we’re very proud of what we created. Glad we could be a small part of your success. If you ever have suggestions or questions please let us know.
Although I just start working with a private lender, I do valuable this information. I met this private at a elderly scrabble club that we both go to every week. Thank daniel for such valuable info.
Mr. Kleyman:
Please help me to get information about private lenders who will/could finance the purchase of land and the construction of residential properties/homes for sale. I would like to get help with this type of financing to help me to strengthen a dealership. If I can find lenders who would not charge me anything for six months after construction to allow me to sell, that would be very good. I may be asking too much, but I would like to know if something like this is possible. Please call me XXX-XXX-XXXX (h) or XXX-XXX-XXXX (c).
Thanks,
Winston Henry
Hi Winston,
True private lenders are not professional lenders. Meaning they’re not going to be advertising and probably won’t show up on a list. You need to put together a proposal and start shopping it around. Give it to people in local REI groups. Ask around for local investors. Chances are you already know someone who would be willing to fund your deal if it’s a good deal.
You are giving good knowledge about the difference in private money. I already understand the difference. Private money is the way.
Thanks for educating all real estate investor
Daniil, terrific and invaluable presentation about private lending and the misconceptions surrounding the topic. The importance of working within state and federal rules and regs cannot be understated if you’re talking to private lenders beyond your immediate circle of friends and family. An understanding of local/federal security laws is critical as the penalties can be extremely punitive. There are a number of experts on the topic, including Alan Cowgill, with whom I recently met in a seminar devoted exclusively to the topic of an unlimited amount of private funds for real estate deals, and it was an eye opener! I’d advise anyone interested in building a serious real estate investment business to aggressively seek out the advice of professionals in the private financing field to insure that you are not in violation of security laws. This is especially critical if advertising for funding or you’re planning to conduct marketing meetings with potential investors. Bill
Right on!
Great information, thank you!!
Thank you Daniil.
I am just starting out in multifamily investments and find your blog so interesting and informative. I have been procrastinating over the four months because I was scared to look for or approach individuals with private money. I did not have the mindset that I am in the business of offering investment opportunities as opposed to asking for money to invest.
Laxley Rodney
That mindset shift makes a huge difference, Laxley! Glad you found this post!
Thank you so much!!
I would just like to add that the Industry is also saturated with scammers who present themselves as the Private Lender but require a boat load of money upfront to lend on the deal and after the Investor turns the money over to the Private Lender he is no where to be found. The information that you share about developing a relationship with your Lender will also protect you from falling into this. There are tons of people that know that you are desperate for the money and they are willing to tell you what you want to hear slightly cheaper but paid upfront. BANG you have just been had!
Thank You Daniil,
Your insight and thoroughness is what makes your material empowering to us all.
Manny
On credibility kit how can I have fotos of my work if I just stating in my business, and how can I have comments of other investor too?
Instead of photos of your projects, post “Sample Project” photos. I talk about it here: https://rehabvaluator.com/private-money/how-to-build-credibility-kit-2/
I always appreciate what you have to share with us. Even though I have been in the real estate business for 40 years, I learn more from you then anyone I look to for advice. Thank you for telling us just how it is and sharing your personal experiences. We have been investing for over 2 years and this is our first loss, Though a significant one for us we are not willing to give up. We still believe that at this time, under our circumstances, this is the best business for us. Thank you for all your help.
Sorry to hear about your loss, Fran! But don’t let that discourage you. Learn from it and keep moving!
Thanks Daniil for writing this. I am a Carpenter of to many years, I always wanted to do this bought the books, cds, I even have the shirt, but I always like the way you communicate with people which is rare. I am inundated daily with emails with the next best thing . I turn them down, I live in Alaska and everyone of them has said no to me because I am in Alaska, so I am keeping your Premium program and I’m following your lead . I will have to find my own PRIVATE INVESTORS and make my dreams a reality. Again I thank you
Troy
Appreciate the kind words, Troy! Keep moving forward. Many “yes”‘s come after hundreds of “no’s” so don’t give up on finding people to partner with!
thanks Daniil for the presentation today I read it and got a beater understanding of my position in my business, it’s just hard for me at this time to follow though due to I have a lot going on in my personal life right now. I have been following you and Jim sense 2014 and I am now ready to focus more so I thank you and Jim again. PS I would like to hear from you ASAP to take about the 14 day
tail I purchased late week and I am not sure here it is now. thanks again hope to hear from you soon.
Hi Ms. Garrett,
Thanks! Glad we could help. I see you also emailed us about your question. I’ll reply to that momentarily. 🙂
Daniil,
Thank you for article regarding private lenders.
I’m seriously considering becoming a hard money lender for spec construction loans for manufactured homes, as I have a developer client for this product.
I will be using rehab valuator in my offering package
Terry Nance
Thanks great information, clarified the differences
Great article we have done it all for years
You are definitely on Point and telling the TRUTH, continue to be a TRUTH DEALER!
D.
I am much more educated to the art of money.
Thank you. I was contacted by sprout a network banking institution who was suppose to work with me since I am a member of the network regardless of my financial conditions; but the system found away to single me out and turn me down, they used my married name to run my credit report and said I didn’t have enough lines to meet the standARD FOR SERVICE. SO WHO DOES THAT it is more than evident that my real score was processing under my credentials I use everyday since the incomplete report flashed on the screen while processing. So please be advised that being a member of someones network is not always a sure thing either.
You was correct, This has been more information than I ever got from paying money for the classes and weekends I have spent learning how to get started. Thank you for the time you spent doing this, it is priceless for me and my future.
Hi James,
We’re glad to have you! If you ever have any questions please let us know.
Thanks!
I really want to thank you for your time and efforts to assist so many people by re-educating us on how to truly get ahead. The information you provide for free is so full of wealth, its like money growing on trees. I also enjoy the comments offered by others, they allow me to tap into the minds and ideas of other people with similar issues. Again, i really want to thank you for your time and efforts to help me grow my business and my wealth.
Thank You,
Elamin Rasul Kariem
Hi Elamin,
You’re welcome! Please let us know if you ever have any questions about the content.
Thanks!
Kudos to you Daniil! You’ve provided a simply stated synopsis of private money lending for those of us looking to get involved in an ethical and profitable way. Thank You.
Daniil, I am a new investor, not one deal yet; because of you I am already feel capable to start my first deal.Great job!
Hi Frantz,
That’s awesome! If you have any questions please let us know. We’re happy to help.
WOW! What an eye-opener this is. This is impressive work and definitely worthy of my sharing it out.
This is a great article! Very informative.
I am an investor in St. Louis MO for years and I am looking for private money partners for my deals.
Hey, Daniil
This is me! Rahman.
It is very very informative article and helpful tool for our industry of our Real Estate Investors.
Hey, man awesome and amazing knowledge and interviews with Ms. Jillian. I just want to say thank you so much for sharing this kind of information and I enjoyed a lots during this conversation.
Thanks again and keep it up!
Fazalur Rahman
Brooklyn, New York
Hi Rahman,
Thanks for the awesome feedback! We are so glad you are happy with everything! Please reach out if you ever need assistance with anything!
Yeah Thank you
Been networking
Did all that
The skin in the game I guess One has to come up with the 15k.
That’s cool.
All this flip houses with other people money no credit checks
Only need a deal that’s profitable is Truly B’S.
OK I get it.
Just as I thought PML IS A FAIRY TALE.
I do not know of any person that is willing to do what you have said.
Trust me I have tried for years now.
I have flipped 4 house in the last 2 years
The LENDER made money the realtor made money the contractors made money
The staggers made money.
Everybody made money except pt me I have lost 200k dollars.
My home my wife all of it.
I guess it only works for those who know the right ‘recipe.
I am convinced that all the gurus are just laughing at guys like me.
I was hoping to be one of those success stories I read about even on this site.
I am going back to trucking.
Tried and lost 4 different times.
Thank you for your help.
But After 4 years this is obviously not for me
Take care.
I hope others fare well with you.
God Bless you
As a REI, what type of insurance should you obtain for new construction flips. Plus there is a lot of info on how to obtain private money. But I can’t find info on the formalities of returning the loan and agreed profits ie;tax forms. Need info on the whole picture not just the front end.
And as always your info is very detailed…and as we know the devil is in the details!!
Emily – I always take out 2 insurance policies: Builders Risk, which protects the structure itself. And a separate liability policy. I suggest you find a good local insurance broker that understands real estate and construction. They can shop around for policies and make sure you have adequate coverage!
Very good information especially regarding SEC regulations and how to circumvent legalities. I feel the secret regarding real estate investing, more than money which is also important, is finding investors who are willing to work with you.
Sharing wealth of knowledge in a simple way for others not only to understand, but to succeed and prosper in this area of complicated real estate finances.
Thanks for such a great article!
Hi Daniil. This article was informative and helpful. I was looking
for some information from you on contractors, I heard that contactors
are better cash buyers to flip your contract to rather than to a cash
buyer or private investor.
Is there a difference between “a Contractor vs a Hard money Lender”?
Are they one and the same?
Thank you
Hi Don, that’s a great question! You may find that type of specific information is better answered in the Facebook group (your membership to Inner Circle). Please feel free to reach out to Daniil in the Facebook group (and not in the comments section on this resource page). We appreciate your engagement and willingness to get more information. Look forward to your question posted in the Inner Circle mentorship group!
Thank you very honest and to the point, one of the best information guides I need to realize that I have to find my lenders and present who I am and that I earned their trust to lend with me. Great lead ideas.
You’re welcome, Stephen!
Every weekend i used to pay a quick visit this website, for the reason that i want enjoyment, since this this web page conations actually nice funny information too.
Hi Sima,
That’s great to hear! We’re glad you’re enjoying our content!
i been trying for 5 years to get a steady line of funding, thanks for the tips, im looking for a hml that i can build with until i get a pml.
I KNOW HOW HARD MONEY OR PRIVATE LENDERS ARE AND TRUST ME IM NOT SCARED OF ANY OF THEM! I DO NEED A LIST OF THEM!#