Private money is the secret weapon of experienced real estate investors. Unlike banks or hard money lenders, private lenders are everyday people who want better returns on their money — and you can offer exactly that. At Real Estate Sales LLC, we teach our students how to attract and work with private lenders from the very beginning.
What Is Private Money?
Private money comes from individuals — not institutions. These are people with savings, retirement funds, or idle cash who want to earn higher returns than CDs, bonds, or savings accounts offer. You borrow their money for your real estate deals and pay them an agreed-upon interest rate. It is a win-win arrangement.
Where to Find Private Lenders
Start with your existing network. Friends, family, coworkers, neighbors, and business associates are all potential private lenders. Attend local real estate investment clubs, Chamber of Commerce events, and networking meetups. Many successful investors also connect with private lenders at their church, gym, or community organizations.
How to Present Your Deal
Private lenders want to feel confident in you and your deal. Prepare a professional presentation that includes the property details, purchase price, estimated rehab costs, after-repair value, your exit strategy, and the projected timeline. Show comparable sales and explain how their investment is secured by the property itself.
Typical Private Money Terms
Private money terms are fully negotiable. Common structures include 8-12% annual interest with a 6-12 month term, secured by a first-position lien on the property. Some lenders prefer monthly interest payments; others prefer a lump sum at closing. The flexibility is what makes private money so powerful.
Protecting Your Lender
Always use a promissory note and a recorded mortgage or deed of trust to protect your lender. Use a title company or attorney for all closings. Being professional and transparent builds trust — and trust is what turns a one-time lender into a lifelong funding partner.
Building Long-Term Relationships
The best private lending relationships last for years and dozens of deals. Always pay on time, communicate proactively, and deliver the returns you promised. A happy lender will fund your deals again and again — and refer other lenders to you.
Start Building Your Lender Network
At Real Estate Sales LLC, we show our students exactly how to find, approach, and structure deals with private money lenders. Our Flip Cheap Houses™ program includes templates, scripts, and real-world examples to get you funded faster.
Visit FlipCheapHouses.com to learn how to attract private money!
