4 Ways to Get a Loan From a Private Lender

Posted by Bobby Montagne on Jul 3, 2017

So, you've found a great fix and flip opportunity, but you lack the time or the pristine credit profile that an institutional lender typically requires. Next stop? A private lender that offers the speed and flexibility that will get you to the closing table before the competition.

Here are four ingredients to a solid business presentation that will help get your real estate investment funded.

1. Market Researchreal estate investing neighborhood

Show the private lender you have done your due diligence. First, know the market. What is the average acquisition price? What is the average after renovation value (ARV)? What is the average time that properties stay on the market? Be sure to bring comps for properties of that size and vintage—both as-is and updated properties.

Then, know the neighborhood characteristics. What size and style of homes are prevalent in the market? What attracts buyers to this market--the schools, proximity to shopping and employment centers, and or access to highways and public transportation?

Finally, know your target buyer. What is the appropriate income level? What is the ideal household size? What features are most popular with buyers in your fix and flip's market? What are the best advertising channels—think email, listing websites, social media, online and or print advertising—for reaching your target buyer in a timely fashion?

2. Investment Planstop watch icon

Show the private lender an investment plan that aligns with your market research. Hard money lenders will want to see a purchase price that is (ideally) below market value, a renovation schedule and budget that increases the property's value without pricing it out of the market, a realistic return projection, and a marketing plan that targets the ideal buyer. Many private money are looking to fund deals that are thought-out and will move swifly.

[ Once you find a lender, how do you know if they're legit? Read on. ]

3. Financial Information

Bring personal financial history, previous years' tax returns, bank statements, etc. Lenders are often willing to look beyond your credit score to assess your overall financial health when they see a real estate deal that is worth funding. A strong net worth and a steady income, for example, can outweigh a weaker credit score. References from other lenders, as well as purchasers or renters of previous houses you have flipped, will also be helpful. If the private lender requires additional personal financial information, be sure to provide it quickly.

real estate with money surrounding it4. Proof of Equity

Bring the purchase contract for the property and show proof of your equity towards the purchase. Private lenders want to see that you are willing and able to invest significant cash into the deal. At Walnut Street Finance, we require 20 percent loan to value of the purchase price, and, because we are forward looking, we are willing to lend up to 75 percent of the ARV. Cash can also help boost a borrower profile when the credit score is less than ideal. You will also need to show you have cash to handle your renovation costs and any contingencies.

While fix and flips may be your side business or even your hobby, be sure you are approaching hard money lenders as a fix and flip professional rather than a hobbyist. To give your presentation that expert look, use presentation software—like Microsoft Excel and PowerPoint or Google Sheets and Slides. Bigger Pockets offers a free calculator for creating custom fix and flip budgets that will help you estimate profit potential and input all costs.

Walnut Street Finance is a provider of hard-money loans, bridge financing and other non-bank financial solutions for real estate investors and developers in the Washington DC region.

Questions? Contact Us!


Bobby Montagne


Bobby Montagne is a real estate entrepreneur with three decades of experience in commercial and residential property development, finance and sales. Having successfully overseen $15 billion in career transactions, he is among an elite class of real estate innovator that has consistently delivered high quality returns to partners and investors.