Need Money? Private Lender Loan

The Private Lender Loan: What Is it?

The private lender loan, or hard money loan, is a loan that comes from a source outside the banking community. The private lender loan is a loan on a property that requires a substantial down payment, or a property in less than desirable condition that can be restored. In the case of the property that is less desirable, the loan can involve very little money down, or even no money down.

There are links on this page to sources for these loans. Be sure that whatever loan company you go with you do a search on Google to determine if the company has complaints or a long track record of consumer satisfaction. I have tried to assemble companies with good track records but the borrower must not assume safety without doing your own search to make certain the company is without bad comments on forums or has good credentials with the BBB.

Professionals who know how to use these loans and understand whether the commercial or residential real estate market that they are dealing with can use these loans to fix up the property and resell for a handsome profit. For those who do not understand thoroughly the ins and outs of these hard money loans, a rude awakening can be the ultimate result. Why would this be the case?

Well, hard money private lender loans come with high interest rates and come with a short duration. This duration can be from a few months to a couple of years. The loans are made to those who can succeed in fixing and selling, and if the selling does not result, the lender repossesses the house with a handsome increase in the value of the house. These are business loans, not personal loans. If you are not considering a career in this field then please stay away from these hard money loans.

One extra word of caution: Never accept a hard money private loan that is a recourse loan. Always seek a non recourse loan, so that the most you can lose are your rehab costs and original interest and note paid. While it is unlikely that you will owe more than the value of the rehabbed house, you don't want to take any chances.

TV House Flipping

TV house flipping is in vogue again with the advent of a near bottom on low end housing. Of course, low end housing is risky, and you have to know your market, and know your ability to sell what you have rehabbed. It is not that easy to do in many circumstances. But TV personalities such as Armando Montelongo are claiming the ability to get you into property. The course is north of $1000 dollars as I have read and the bus tour with the ability to get hooked up with private hard money lenders is quite expensive. I have heard but have not confirmed that the cost is north of $20,000.

But for some people, at the right time and at the right place, this could be a good deal. For others it will be a loss of crucial savings. I am not at all saying that these programs are a scam but they are buyer beware, and in a few states they are not legal. You have to know yourself, and your ability to fix a property up with minimal cost and have the salesmanship to sell it before the loan terminates or you have paid too much interest. There is no doubt that some have and are becoming wealthy, so just go in with your eyes open. TV personalities can be quite persuasive and have strong financial backing. They are looking to make money whether you do or not.

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Comments 21 comments

Sandyspider profile image

Sandyspider 6 years ago from Wisconsin, USA

Good information on private lender loans.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

Thinking about getting into this Sandy? I know you like real estate.

amillar profile image

amillar 6 years ago from Scotland, UK

In the UK there's no limit to interest rates. I'm told it's quite legal to charge 1000% interest. Not for me thanks.

Thanks for this useful info.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

You are welcome Amiller. It is risky business. Again, if you rehab and there are no buyers, you could be hurt badly. These loans are for people who really understand the real estate market where they live. And, watching out for the rate of interest is very crucial to your economic health. In Britain they are almost like glorified payday loans in their usury.

Hello, hello, profile image

Hello, hello, 6 years ago from London, UK

In the UK private loans is a very dangerous thing.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

Yes, they sound like payday loans with massive interest.

multimastery 6 years ago

Thanks for sharing bgamall.. I really like this list that you've included. The great thing about private loan is they're not just dependent upon the traditional "bank approval system". Private loans of all types can be made through individuals, businesses and organizations. When you get a chance, you can check out my Private Bad credit Lenders hub & website. Thanks again!

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

Again, Multimastery, we have to understand the risks. Option arms are resetting, so this sort of lending for the time being may be more effective and less risky at the very bottom end of the housing market.

H P Roychoudhury profile image

H P Roychoudhury 6 years ago from Guwahati, India

Loan is good for any kind of activity but one has to calculate before taking loan to what extent it would benefit him. It is a give and take policy of interest. Loan is good if it is profitable, if not it is bad for him.

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bgamall 6 years ago from Las Vegas, Nevada Author

Yes, if the loan is for making money, and you can safely calculate your market, it can be a good thing.

hard money 6 years ago

Private Money money is actually very useful most specially for investors who are lack of financing.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

Investors who are very knowledgeable in their investment field can benefit, but with caution and care.

Eric 6 years ago

Private lending could be the only way.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

Actually Eric, that is the truth. Private lending may be the only way to make it in real estate, but must be done with care. The banks won't help, that is for certain.

We need US$13,000,000.00 soft loan! 4 years ago

We need US$13,000,000.00 soft loan for our Low Cost Housing business for only 3 (three) years. We give u 5% successful fee!

Please contact us now at:


bgamall profile image

bgamall 4 years ago from Las Vegas, Nevada Author

I can't verify your business veracity, but I am leaving this post up in case a lender wants to contact you.

Shree Kant Sharma 3 years ago

Be need loan for business to us in India

bgamall profile image

bgamall 3 years ago from Las Vegas, Nevada Author

Shree, perhaps you would be interested in micro loans. Just google them. You get a reputable company to lend you the money. It is actually individuals who lend the money through the micro loan broker website. Wikipedia may give you more information, and I have cannot speak for these companies:

Valeriy 3 years ago

I do not believe in private hard money lenders ! During 2 years search for a reliable and serious

lender through the internet I got a 2100 proposals. All 100% - crooks and SCAMS !!!

I lost a lot of their own time and money !

bgamall profile image

bgamall 3 years ago from Las Vegas, Nevada Author

I totally agree that in most cases they are not to be used! They are only valuable for people who know their real estate market thoroughly and know they can make the money back through rehab. Other people should not use them and most people should not consider them.

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bgamall 3 years ago from Las Vegas, Nevada Author

Also, Valeriy, most hard money loans are local.

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    Gary Anderson (bgamall)704 Followers
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    Gary understands that times are tough, and seeks to make people aware of financial pitfalls. Loans must be undertaken carefully if at all.

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