Private Lenders-Hard Money Lenders - Do's and Don'ts

photo credit: Karen Eliot

Information about how to deal with hard money lenders / private lenders and how the process works with them is quite inadequate on the internet. For this article, I will only use the term private lender, but it can mean either or.

Not many people know how the process works, and not many people even know such lenders exist.

This article will focus on what to do, and what not to do, when dealing with private lenders.

Private lenders have very simple lending criteria:

1) Around 65%-75% of the value of the property.
2) No income or credit checks.
3) Money available in fast time frames.
4) High interest rates; 10-15% is the norm.

What NOT To Do:

1) Contact these lenders if you are leveraged more than 75% of the value of your property. If your property is worth 100 000$ and you owe 70-75000 already on your property, it is a complete waste of time to contact these lenders. They lend on the equity of your property.
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