How To Find Private Money Lenders To Fund 100% Of Your Project

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Today’s podcast episode is about Private Money Lenders and how you can use them to fund your project — in many cases, funding the purchase AND the rehab.

I’m your host, Ken Walker with the Poston Investment Collective and if you would like to get more projects going, but don’t have enough cash, you’re gonna want to pay close attention to today’s episode.

Private Money Lenders tend to care more about your track record than your credit score — so if you’re looking for some unconventional funding, they can be a great option — but there are caveats. Today, we’ll uncover some of the potential problems of funding your project with private lenders — but we’ll also look at some of the benefits — and perhaps most importantly, I’ll show you how and where to find them.

Private Money can be used in a buy-n-hold, it can be used for a fix-n-flip — basically, any arrangement that you and the lender agree on. The key is, you and the lender hash out ideas and solve problems, working out the details including short or long term, installments, lump sums and more.

Private money typically comes from three sources — we’ll call those your Primary Circle, Secondary Circle & 3rd-Party Circle.

Your Primary Circle

The most important source you have is your Primary Circle — because these are the family and friends who already know you. That means, if you show them a reasonable business plan, they’ll be the easiest to partner with, the ones that you can convince.

You have to be careful though because we’re talking about money — and money can ruin even the closest of relationships. So you don’t want to invite people to take risky endeavors or get them to give you money they can’t afford to lose.


Your Secondary Circle

One of the reasons your Primary Circle is so important, is because it’s also the source of your Secondary Circle — the friends and family of your Primary Circle.

The larger your Primary Circle is, the larger your Secondary Circle. So networking is a huge benefit here.

Ideally, you’ll want an introduction from your Primary Circle’s mutual contact — this is like word-of-mouth advertising because a personal introduction is a sort of endorsement.

You’ll need to be prepared with your business plan, in presentation form, so that you can spark dialog — and be prepared to field questions. This group won’t be as inclined to just write you a check on the spot — you’ll need to prove you mean business and that you have the skillset to get the project to the finish line.

Your 3rd-Party Circle

These are people that are outside of your connections — meaning you don’t know them, and likely nobody you know, knows them. Consequently, they’ll be the hardest investors to partner with — and relationship building will be the most important technique, along with time.


Finding Private Money Lenders

To find Private Money lenders, start with the obvious — your Primary and Secondary Circles.

Here’s where a social media presence is a huge help. Basically, you want to document any relevant skills or projects — so before and after pics of projects you’ve completed.

What you want to accomplish is, branding yourself as a competent real estate investor — to your Primary and Secondary Circles.

But in addition to branding yourself on social media, you’ll also want to reach out with phone calls or emails to all those in your circles — real estate agents, brokers, accountants, technical contacts — anyone you’ve worked with and have a professional relationship with.

This type of strategy can typically stir up $10k investors in a very short period of time — it only takes a few of those and you’ll build up enough momentum to get the project started.

Your Presentation

While it’s possible to find investors from your Primary Circle without much effort, it’s a good idea to put together a presentation of your proposal before talking to any potential lenders — and that presentation should represent you as a professional.

Remember, it’s not your credit score they’re looking at — it’s your performance record.

Why should they invest with you? What projects have you accomplished? What sort of ROI can they expect? Can you provide a business plan that shows that handing over their money to you, has a reasonable rate of risk-to-reward ratio? Because that’s what they’ll be looking for.

Finding Lenders Who Are Out Of Your Network

Your 3rd-Party Circle is made up of people you don’t yet know — so let’s look at where to find them.

Local Groups

You can usually find local investor clubs or groups that meet up regularly — providing a great opportunity to network with like-minded people.

Public Records

You can also hit the public records at your local courthouse — looking for investors who are carrying mortgages.

When a mortgage is created, all records are public and recorded by the local county municipality — usually even available online. You are looking for the “grantee” line — that’s who holds the mortgage. What you want is grantees that are NOT a bank — so someone’s name or even a corporate entity.

Obviously, if you develop some rapport with the clerk at the courthouse, chances are they know some local lenders and can point you in the right direction.

Get On The Phone

You’ll want to put together a list of potential lenders, complete with contact information. But before you reach out, make sure you’ve practiced delivering your presentation — and have a script prepared (like a telemarketer) so that you can present yourself professionally and don’t sound like you’re stammering.

Your script doesn’t need to be long because it’s only going to introduce you and your proposal — after that, the conversation can go literally any direction.

Hello, is this Mark? I’m Ken Walker and I was going through some documents down at the courthouse, and I noticed you lent money on the Jefferson Street project — my company works on similar rehab projects and I wanted to see if you’re looking to get involved in more opportunities?

Rehearse your script and be prepared to wing it once the conversation gets rolling — build rapport and don’t be pushy. Ask them about projects they’re involved in, find out what their interests are, do they have kids or grandkids, are they active in local teams or do they have hobbies you can relate to?

Just don’t forget, a savvy lender can cut through any B.S. so know your business plan inside and out, and don’t play pie-in-the-sky games. Investors want someone REAL to work with.

Direct Mail

You don’t have to limit yourself to phone calls though — emails and old-school letters work as well. Keep your communication brief and have a clear call to action — get them to reply or give you a call.

Remember, your primary objective with anyone in your Secondary or 3rd-Party circles, is to build rapport first. Don’t market to these folks unless they have specifically subscribed to one of your lists. Private Money lenders generally loan money based on a personal relationship with you.

Structuring Private Money Loans

When it comes to structuring a private money deal, there are a ton of options — it’s up to you and the lender to determine what will work best for all those involved.

For example, if you’re going to do a buy-n-hold, the lender is putting up the funds for the purchase and rehab of the property — and the borrower repays that loan with interest. That option will probably be based on an amortization schedule and it could include a balloon payment in the not-to-distant future.

You can also combine options — for example, you could get a conventional loan, but use private money for the down payment and rehab work. This would put the private money lender in a second mortgage position — but not all banks will allow that because they want to see that you personally have something to lose if the deal goes south.

If you’re doing a fix-n-flip, you might workout a profit-sharing arrangement. So in this case, the lender funds the purchase and rehab — you aren’t responsible for monthly payments, and the lender is a silent partner. Once the property sells, you divide the profits as outlined in your agreement.


Speaking of agreements, in any of these cases, you’re going to need legal documents filed — including a deed of trust and promissory note which will provide terms and conditions in clear language, to protect both you and the lender.

Even (especially) if you’re dealing with friends and family, you don’t want to just let this ride — you need legal documentation so that everyone knows what risks exist and what responsibilities everyone has.


Finding Private Money lenders can be a challenge, but if you’re determined to accomplish a project that is currently out of your reach, due to limited funding, it can be a rewarding arrangement.

You can even pool investor funding with a syndication, which gives you a legal entity that can conduct your business — and allows for multiple investors to combine resources.


And if you want to be involved in more projects, without tying yourself down to more time commitments, you could also join a collective. The Poston Investment Collective has several projects going, you can see those at

Minimize risk & maximize leverage with the Poston Investment Collective.

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Ken Walker

Ken Walker

Ken Walker is the Digital Editor of OPM Secrets. Having started in commercial construction right out of high school, he has since worked in every aspect of new construction from foundation work to framing, drywall, roofing, plumbing and electrical — as well as interior finish work, cabinet & countertop installation, windows, doors and siding.

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