Whether you’re brokering deals, building a portfolio, deploying capital, or crossing over from residential sales — these fundamentals separate the professionals from the hopefuls.
Private money is not complicated. But it is precise.
After funding over $1 billion in loans, the team at Think Realty has seen every variety of deal, borrower, and outcome. The professionals who close consistently aren’t necessarily smarter than anyone else. They’ve just internalized a set of fundamentals that most people skip because they seem too basic.
They’re not too basic. They’re the whole game.
This article breaks down six moves that apply across every role in the private money ecosystem: brokers, investors, lenders, agents making the crossover, and practitioners who want to level up. A companion one-page cheat sheet goes with this article — perfect to print, save, or share.
1 – Know Your Capital Stack Before You Talk to Anyone
Every deal has a capital stack. Most people think about it only when they’re stuck. Smart professionals think about it first. The capital stack determines who gets paid first — and therefore who takes the least risk — how leverage flows through the deal, and what returns each party can realistically expect. For private money deals, senior
debt typically caps around 60–70% LTV. Anything above that requires mezzanine financing, preferred equity, or a significantly stronger borrower profile.
The mistake most borrowers make is approaching lenders with a vague sense of what they need. “I need $400,000” is not a capital stack conversation. “I need $400,000 in senior debt at 65% LTV on a $615,000 ARV fix-and-flip, with $80,000 of my own equity and a 6-month exit timeline” is.
“Lenders approve you before they approve the deal.”
2 – Underwrite Like a Lender — Even When You’re the Borrower
The single biggest predictor of whether a deal closes — and whether it’s profitable — is the quality of the underwriting. Not the market. Not the contractor. Not the lender’s mood. The underwriting. Most borrowers underwrite to make the deal work. Professional borrowers underwrite to find out if the deal works. The difference is enormous.
Three rules to underwrite like a lender:
› Use the lowest comparable sale, not the highest. ARV is not an aspiration.
› Stress-test the timeline. What happens if your 4-month flip becomes 7 months? What does that do to
your carry costs, your returns, your lender relationship?
› Add 10–15% to your rehab estimate as a mandatory contingency. Experienced operators don’t skip this. They learned it the hard way.
If your deal only works in the best-case scenario, it’s not a deal. It’s a gamble.
“If your deal only works in the best case, it’s not a deal. It’s a gamble.”
3 – Build a Lender Pipeline Before You Have a Deal to Fund
The most dangerous position in real estate finance is chasing capital with a deal on the table and a clock running. It’s how you accept bad terms. It’s how you miss closings. It’s how you burn deals and relationships at the same time. The professionals who consistently close have a lender pipeline they built before they needed it. Identify 5–10 private lenders. Learn their criteria: asset types, geographies, LTV ranges, and rate expectations. Then stay in touch. Send a monthly deal flow update — even when you don’t have anything to fund. Keep
yourself in their minds as an active, professional operator. Your reputation as a borrower is
your credit score in this world. Protect it accordingly.
“The best borrowers never chase capital. Capital waits for them.”
4 – Master the Broker Conversation — No Matter What Role You’re In
This one surprises people. Why does a lender need to master the broker conversation? Why does an investor? Because private money is a relationship ecosystem. Everyone in it is in the business of referrals, whether they know it or not. When you can articulate the value of private money clearly — as speed, as certainty, as a tool rather than a last resort — you become someone worth talking to. For crossover agents especially: ask every investor client how they’re financing their deals — every time. Present two scenarios side by side: conventional financing vs. private money. Show the timeline difference. Let the numbers make the case.
Agents who understand private money earn referrals from lenders. Lenders refer buyers. Buyers bring more deals. It compounds.
“Agents who understand financing earn referrals from lenders. It Compounds.”
5 – If You Deploy Capital, Do It Strategically — Not Just Quickly
For hard money lenders and private capital deployers: the temptation to put money to work fast is real. Idle capital feels like wasted opportunity. But bad loans are far more expensive than slow deployment. Before you price a single loan, define your risk tolerance explicitly — not conceptually. Write it down. What LTV ranges are you willing to fund by asset type? What markets are in or out? What’s your minimum borrower experience requirement?
Then diversify across deal types: fix-and-flip, DSCR, bridge loans, and new construction each carry different risk profiles and timelines. A portfolio built across categories is more resilient than one concentrated in a single type. Invest in your best borrowers. Reward repeat business with faster closings and slightly better terms. The loyalty you build is worth far more.
“Bad loans are far more expensive than slow deployment.”
6 – Systematize Your Deal Flow — Consistency Beats Hustle
Hustle gets deals done in the short run. Systems build businesses.
The operators who close the most deals aren’t working the hardest — they’re working the most
systematically. They track every deal, contact, and outcome in a CRM. They have a deal one-pager template they can send to a lender in under 10 minutes. They do weekly pipeline reviews. Tracking your pipeline does two things most people underestimate. First, it forces you to confront reality about where deals actually are. Second, it gives you data over time — about which lead sources work,which lender relationships close fastest, which deal types pencil most reliably. That data becomes a competitive advantage. Gut feel is for beginners. Professionals use data.
“Gut feel is for beginners. Professionals use data.”
The Common Thread
Look across these six moves and you’ll notice something: none of them are tactics. They’re habits of mind that professionals in this industry develop over time — and that newcomers can adopt deliberately.
Know your capital stack. Underwrite conservatively. Build relationships before you need them. Articulate value clearly. Define your risk posture. Track everything.
That’s the job. Not glamorous, but genuinely powerful when executed consistently.
0 Comments