Real Estate Investment News & Blog

Where Are the Private Lenders? Sitting Right Next to You…

Every successful real estate investor needs a source of private lenders. When you can find great properties at low prices, you need money fast. Waiting is just not an option.

Why You Need Private Lenders

Going to a bank and getting a loan is a slow process full of red tape, endless paperwork, and worst yet–the unknown of whether the loan will even be approved. Often, banks will loan on the purchase price of the house, not on the value of the house. In addition, banks only allow you so many loans before they cut you off, no matter what you financial situation.

Private money can be used for repairs, down payments, re-instating a loan, cash for a short sale, moving money for the seller, and much more. You have the ability to purchase multiple properties with little or no money down. Private money loans do not appear on your credit report, so your FICO score is not affected. And closings can be done within 7  to 10 days–sometimes sooner.

private lenders

There’s an endless number of people who want to make a good return on their money.

How to Find Private Lenders

There is an endless number of people who want to make a good return on their cash. Most people put their money in a savings or CD account with a very low interest rate that barely covers inflation. Others have money in a 401k or other employer plan and realize the returns are small and the risk is large. The question is…how do you find these people?

There are countless ways to market and find private lenders, but the best way is to look in your inner circle first. By inner circle, I mean people you know like your parents, siblings, grandparents, friends, neighbors, business contacts, fellow real estate investors from your local real estate club, your lawyer, accountant, doctor, etc. These are people that already know and trust you.

There are other ways to find private lenders through direct mailing to CD holders, inviting people to an information luncheon, advertising in the newspaper (Be careful of what you state in our ad – Read the SEC rules).  But you’ll get more than enough money using your “warm” inner circle list and probably won’t need other venues.

Get Your Private Lending Program Up and Running

You need to create a “private lending plan” with the details of your program spelled out. Your prospects need to feel secure and assured that you have a solid plan. You need to be able to explain it in clear and concise language with no detail left out. Create a presentation to show them these details and possibly some in-depth examples of how the program works.

It’s important to show that you’re going to give them a note, mortgage or deed, add them to the insurance, get them title insurance, etc.  You’ll need to consider the interest rate (simple or compound), the minimum investment, when does interest begin, do they get a minimum interest (i.e. at least 2 months), do you pay higher for second liens, whether you will pay them monthly or accrue the interest, etc.

Have a plan for objections like, what if I want to get my money out earlier or do you pay partial months in full, etc. Leave no stone unturned and have the answers BEFORE they have the objection. Then you start talking it up to everyone you meet. Simply tell them what you do and how you can give them a good return on their money secured by real estate.

Create a Credibility Kit

Start with an overview page with information about you and your history in real estate: number of deals, education, training programs, certificates, memberships, etc. Give the impression that you are a real estate professional and you are serious. Have a page that explains why you use private funds and borrow at such high rates.

Then discuss how the program works and the key benefits to the private lender, such as high return rates, secure investment, and show them the paperwork. Explain the sources of capital they have available for making the investment such as HELOC, IRAs,  401K, CD, savings accounts, etc. Give deal examples and walk them through the process with past deals, so they get a flavor of what happens in each step. Finally, have a page for frequently asked questions.

But I Don’t Know Any Wealthy People

Your private lenders don’t necessarily need to be wealthy. Someone with $20,000 to $50,000 in their retirement plan could help you do a lot of deals!

I hope you get a sense of the importance and relative ease of getting private lenders lined up for your business and how it can take you to the next level. It will open up a whole new realm of possibilities for your business!

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About the Author...

Marko Rubel is a leading authority on creative real estate investing, specializing in pre-foreclosures. He is known for creating automated systems that enable investors to skyrocket their profitability quickly.

He is an active, full-time investor who has bought and sold more than 300 properties. Using his proprietary automated systems, he earned profits exceeding $1,000,000 in a single year, while working only a few hours per deal.

His web site is, and he is also the host of the Real Estate Investing Forum at


  1. Eleanor I. Smith says:

    I have gone to many meetings and seminars, even signed up and bought their books and tapes,with the assurance that they would show me how to get these Private Investors. i have lost a lot of money on all these programs, I give up with these people.There must be a better, more honest way.

  2. EnergyWise says:

    Very good information Marko, Really liked the information you have shared it is very useful for me as i was planning to invest San Diego and looking for private lenders…
    Thanks for sharing..


  3. Tyler says:

    Eleanor, no need to give up, sounds like you’ve paid and studied and read enough, get out there and do it! Trust me, it IS easier than you think. I’ve found private money from clients, coworkers, family, and one fellow investor. I’ve never been lent money from someone I didn’t have a personal relationship with even though I have tried advertising. You will feel this is a very honest way to make money when you end up with a big check and a new family ends up with keys to a house at a fair price. If everyone doesn’t win, the deal is unlikely to go through. Good luck!

    • Eleanor I. Smith says:

      Tyler thanks for your response .i would to hear from you personally so I could get some pointers.

  4. Bill Elliott says:

    This is a very interesting and helpful article. Is there a source where I can acquire examples of a Private LendiAng Plan, frequently asked questions and objections, and a credibility kit?

  5. james fonzo says:

    I am an eager, fast moving , quick learner. I’ve been on the construction side of “flipping” houses, but I am ready to be in the buying/selling side of it. I know how to go out and find the properties and how to make them better and worth more money. ALL I NEED IS THE INVESTORS OR LOANS…..I DON’T KNOW HOW TO FIND THESE INCOME SOURCES……WHEN I DO, IT WILL BE FULL STEAM AHEAD…..PLEASE HELLP ME FIND THIS, SO WE CAN ALL MAKE MONEY!!!!!!!!! Thank you, Sincerely, James Fonzo

  6. Sheila Mitchell says:

    I also have been on construction sites for flipping houses in the Baltimore Metropolitan areas in which I am looking to purchase/Rehab and Sell. For the past year I have done my do diligence in investing all of my money, example savings etc in Real Estate Training. My goal is to buy/rehab and flip to sell. I just need to find investors or loans, that would give me my “first Start”. I need to find these financial sources so that we all can make some money. I have no family, friends, co-workers etc. that can help. In fact they think I am crazy to do this venture just a lot of “na sayers”; of which I have distanced myself from them – Too negative! Please can you help me.!! I have a real estate agent who sends me foreclosure properties and I am making offers. Thing is that what if one of those offers are accepted? How can I come up with funding to purchase? On my first deal I would like to partner up with an investor or JV. In calculating the ARV (65%) I am able to do a presentation showing the entire numbers in ref to the ROI and Cash on Cash return. Also an exit strategy if needed showing rental monthly income and expenses. Please help me – Just trying to do that first deal. Thank you. Sheila Mitchell, Baltimore, Maryland

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