How To Become a Private Money Lender

In the context of hard money loans, there are 2 definitions of Private Money Lender

Definition #1- A private Investor using his money to invest in hard money loans through a hard money broker/ lender. The money invested could be in checking accounts, Saving accounts, or IRA accounts. The ROI on the loans is between 5%-15% depending on the lien position LTV and other factors. The loan terms are typically 6 to 36 months.

Definition #2- A hard money broker or hard money direct lender who arranges hard money loans to borrowers with substantial equity in real estate. Most hard money lenders place loans up to 65% LTV. Some lenders will go up to 75%, and for Fix N’ Flip properties or loans secured by two or more properties (blanket loans) up to 100% LTV or even more.

Become a Private Investor by investing in hard money loans

Investing in loans secured by real estate equity in real estate could be profitable and bring you a stream of passive income. The best way to start is to find a reliable recommended lender who can guide you and answer the general questions about investing in trust deeds and specific questions related to a specific loan.

If you wish to invest in a hard money loan and earn between 5%-15% ROI, register as a private investor on Lendersa ® website, and you will be contacted by hard money direct lenders or hard money brokers.

Before you transfer any money or sign any document, it is imperative that you trust the lender/ broker and that you understand the hard money lending concept, including all the potential risks.

There are 2 methods of investing in trust deeds. Direct investment or investing in an investment pool there are pros and cons of each.


Here are some questions you can pose to the lender:

Qualify your lender!

  1. Are your licenses current? Do you have an NMLS license? ( NMLS is required for certain loans secured by 1-4 residential properties)
  2. How long have you been in the hard money business?
  3. How long has your company been in business?
  4. What experience the broker/ owner has?
  5. How many loans you personally generate every year/month?
  6. How many loans and what volume is the company producing?
  7. Have you been sued by investors or borrowers? What happened?
  8. Do you have defaults now? How do you deal with default?
  9. Have your investors ever lost all or part of their principal?
  10. Have your investors not received all the interest due?
  11. Who is servicing the loans?
  12. What fees are associated with originating and servicing the loan?
  13. What is the minimum amount of money I can invest?

Real estate agents become hard money lenders

If you are a licensed real estate agent or a mortgage loan officer and wish to increase your income by arranging hard money loans, register as a mortgage broker and follow lendersa instructions. Lendersa will give you all the tools you need to start generating hard money loans for your old and new clients. You will help buyers close transactions with private money and give life to contracts that were dead.

  1. Make more commission
  2. Connect with hard money wholesale lenders
  3. Retain buyers
  4. Receive recommendations and new clients

Learn more about how to become a Private Money Lenders