Finding private lenders with deep pockets can really jump start you real-estate investing business. It can be INCREDIBLY difficult to convince a family member to fund a deal simply because most people don’t have the knowledge of real-estate. Here is a simple trick to find a private money lender if you’re out of options and don’t want to turn to hard money:
- Find house flippers via your counties GIS and/or MLS
House flippers can easily be found in your counties GIS by looking for these things:
- Areas with large amounts of flips and investor activity
- LLC’s with investor names (“Wilmington Property Acquisitions, LLC”)
- Search your state’s LLC database to find the name
- The vast majority of times buy-and-hold investors will not use private money. Exclude them.
- Search through the MLS for properties bought and sold in short periods of times
2. Go to your counties Register of Deed
Your counties register of deeds should look something like this, If you have a smaller county, these records will not be available online so you will have to call.
- Search via name for ANY property owner (Make sure to put the name, because you can’t search by LLC)
- Look for words “deed of trust” and/or “satisfaction of mortgage”
- Start searching thru individual deeds
3. Find words like “lender” in the deed and look for real names (not mortgage companies)
There is no exact science to this. Look through individual deeds and begin to look for real names. A real name with the words “lender” next to it is a sure fire sign of a private lender.
4. Google search lender and give them a call
This is where most people stop. The thought of getting rejected via a cold-call is too much and most people don’t take the next step. Here are my tips in order to avoid getting hung up on:
- Don’t call individuals unless you have a deal
- Aim to take private lender out to lunch and talk more (people don’t throw money at strangers……usually)
- Have your numbers computed. How much ROI could he/she recieve? What is the property under contract for? ARV? Do you have a good track record? Do you seem professional?