Today on the Rules of Thumb blog from MoneyThumb we are going to share a great article for those of you who are interested in learning how to find private money lenders who will 100% finance your deals. The article is from Bigger Pockets and was written by investor Anson Young. The article goes into great depth about how Mr. Young discovers ways to have private money lenders 100% finance his deals. These steps can easily be adopted by investors who are looking for new funding avenues.
Below is a portion of the article for your reading convenience, but we highly suggest you read the full article, where Anson Young discusses first approaching investors you know, getting the word out, the soft pass, the hard sell, and methods for approaching investors you don't know.
"Private money lenders typically care more about the deal than they care about your credit score. They want to know you have a solid track record of flipping in order to feel good about handing you a six-figure check. They want to be protected by having a first deed of trust (mortgage) on the property, so their money is secured by a hard asset. Did I say track record? Because I’ve found that it’s the most important thing these savvy individuals look for in an investor.
Where does this leave the new investor with little to no track record? Well, sometimes you have to start with some hard money loans before you can graduate to a better deal on your lending But that isn’t always the case, especially when working with people who know you and believe in you (who you know section below).
Unlike a loan officer at some big national bank, private money lenders rely much more on personal relationships. They are literally hitching their money to your success. As a relational business, it may take a few "dates" before they are ready to get married to you long-term, to see if you are compatible, how you work, and if you actually put the dishes away like you promised."
If you are a hard money lender, we'd love to hear your feedback and personal experiences as they relate to this article from Bigger Pockets. We'd also like to suggest you use the best PDF financial file converters on the market to vet your prospective borrowers. The MoneyThumb tools we offer lenders are specifically designed for your needs and will make your lending decisions go much easier and faster by offering you the ability to convert borrowers financial statements with just a few clicks.