For newer real estate investors, the world of private money loans can often feel intimidating, especially if they’ve only ever borrowed from traditional banks.
But private money lenders – also known as “hard money” lenders – serve as important partners to real estate entrepreneurs who need relatively quick financing from professionals who understand the unique demands of the industry.
Fortunately, since 2009, the Private Money Lending Guide (PMLG) website has been there to share information on private money loans, how they work and how to employ them in a real estate investment project.
Not only that, the site also connects investors with lenders who can provide the financial resources that investors need to carry out their projects – projects, by the way, that many banks may refuse to consider.
“PMLG has a lot of great information about what is private money or hard money, and how to best use it,” said Twilla Miller, the site’s operations manager. “Also, it features a directory listing of lenders across the nation to assist with both residential and commercial deals, ranging from $50,000 loans to $5 million loans.”
While the site is a powerful resource for newcomers to private money, experienced investors have learned to rely on its contacts, too.
“It doesn’t matter what type of deal you are trying to put together, they have you covered, no matter how big your deal is,” said Josh Caldwell of Pittsburgh Real Estate Investors Association. “The process is amazingly simple, and the funders are real. No BS, false leads or shady tactics, just real money for real projects.”
How PMLG Works
It’s simple for investors to access PMLG’s network. They just need to click “Find a Private Money Lender” from the home page (www.PrivateMoneyLendingGuide.com). After selecting their criteria from each category, they’ll be provided a list of lenders that match. From there, they’ll click into each lender and complete a form that prompts them to answer a few questions, including the type of property in question, how much money they need to borrow and which states they operate in.
According to Miller, PMLG’s network includes more than 60 lenders from across the country. Their focus is on investment properties, primarily in the United States, though the directory does have the potential for international expansion. What’s not on the menu? Personal loans or houses occupied by the borrower.
“The majority of the current investors that find PMLG and submit their deals are residential,” Miller said. “However, we do maintain a good pool of larger commercial lenders to try to help everyone. The one area we aren’t working in currently, besides international and owner-occupied, is equity deals. All the lenders currently provide debt loans only.”
Real estate investors of all experience levels are welcome at PMLG, including those who are preparing to seek their first private money loan. Several lenders in the site’s network are open to coaching first-timers.
“The main requirements are a 20% minimum down payment – ‘skin in the game’ – or a 620-plus credit score,” Miller said. “Investors who fit both of these criteria will have the easiest time securing a loan, but those who may not still have options with us.”
The site’s “matchmaking” service is a win-win for both investors and lenders. Investors don’t have to make dozens of calls to reach the right lenders. Lenders, meanwhile, can easily let investors know what kinds of deals they like to see.
“We just make a simple connection between the right investor to the right lender, to avoid investors cold-calling lenders or sending a deal that isn’t a fit for the lender,” Miller said.
PMLG’s service is free to the individual investors. Lenders, however, do pay a fee to be included in PMLG’s listings.
PMLG itself is neither a lender nor a broker. “PMLG doesn’t want to be a middleman, so we leave any document collection to each lender, so they only request what they need,” Miller said.
More Options for Lenders
PMLG has a “sister” site, LoanMLS (www.loanmls.com), where people who have made loans on PMLG can turn and around sell them.
“Instead of continuing to collect payments each month, a lender can sell the ‘note’ on LoanMLS and get their money back in full to make more loans,” Miller said. “However, LoanMLS is not exclusive to lenders – there are more than 25,000 people registered nationwide who prefer to collect payments from notes instead of buying a property themselves to rehab and sell or rent out.”
Don’t be shy about reaching out, Miller urged. “If an investor has a question or issue, they can also reach the PMLG team at any time,” she said.
PMLG is part of Affinity Enterprise Group, which publishes Think Realty Magazine. AEG acquired PMLG in 2013. While PMLG is always being updated, both with new lenders and new information, a major update is planned for this year. For more information, visit www.privatemoneylendingguide.com or call 866-659-7579.