Hard Money Investor Guide – Part II
If you’re sold on the idea of maximizing your wealth by becoming a hard money lender, you might be wondering what your next steps should be. By following these tips as a general guideline, you’ll be well on your way to securing your first private money borrower.
- Adequate Funding
- Business Entity
- Careful Preparation
- Marketing Yourself
If you prefer to email us, fill out the form below and an associate will contact you to review the loan scenario and provide a quote.
Adequate Funding
Start by making sure you’ve got enough money to lend; since many private money borrowers tend to be real estate investors, the amount of money you’re going to need up-front is significant. Many private money lenders will take money out of their own accounts for this type of investment, though if you don’t have all the money you need yourself, you always have the option of partnering with other investors to raise the funds you need as a means of getting started.
Business Entity
The first “official” step you’ll take towards becoming a private money lender is establishing yourself as a legal business entity. Ideally, you should set up your business in such a way that will protect you from individual liability. A couple of options that will allow you to do this are a corporation or a limited liability company (LLC). Both of these are relatively simple and straight-forward to set up with help from an experienced lawyer or accountant to handle the formalities for you.
Careful Preparation
Keep in mind that hard money lending is high in risk and high in reward, so you should have a “game plan” from the very beginning that takes into account best-case scenarios, worst-case scenarios, and everything in between. More than likely, you will be issuing financing to real estate investors who want to buy and flip distressed properties, so there is a fair amount of risk here, especially in terms of the potential for default. Take the appropriate precautions to protect your investment, such as obtaining a large deposit before lending any cash.
Marketing Yourself
Once your business is established and you’re ready to lend out money, you’re in business! The next step will be to market yourself as a private money lender, which you can do in a variety of ways. One popular option is to network with some local mortgage officers and offer them referrals for sending borrowers your way. Advertising both online and in traditional print ads is another great way to spread the word of your lending services and find your first clients!
Contact Hard Money Lenders Arizona anytime, to speak with one of our very helpful and highly knowledgeable loan specialists about your property investment funding in Arizona
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The speed at which Michael’s team worked at allowed us to close the deal in less than 3 weeks.
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I highly recommend everyone to work with Michael and his team and insist on working with Laura, Michael’s loan processor’ whom without her diligence, our loan probably would’ve been delayed.
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Michael's assistant Lara made sure everything got done right, and on time. She is great to work with, and responded quickly to any question I had. Together they make a great team and I look forward to working with them in the future.
My wife and I were recently visiting Scottsdale for her birthday and had decided to look at a few homes. Nothing immediate, just getting ideas for the future. Then on the last day we run into the perfect new construction home, only problem is we weren't prepared to buy. Most of our long-term funding was tied up in our home back in Oregon and to complicate things further, the seller had another cash offer on the table and a ridiculously fast 3 week closing requirement to secure the property.
So, we took a leap of faith and called Hard Money Lenders with Barrett Financial and got Michael on the phone. That quickly took us from an impossible deal to closing on our new home in record time. Michael clearly communicated all the terms and numbers up front. And being such a rapid deal with a large amount of escrow on the line, he personally checked in with us daily.
We have worked with a lot of great people in the real estate and mortgage industries for over 30 years and have to say that Michael is one of the top professionals we have ever met. A true expert in mortgage and bridge loans / private lending. Even better, it was clear to us every day that Michael truly cares about his clients. Best phone call we could have ever made.
Thank you, Michael and Lara, for helping us make this North Scottsdale dream a reality!
Saleh.
Steven