Not all private lenders are created equal. A simple Google search of “Private Lenders” brings back over nine million hits. Searching “Hard Money Lenders” willing bring you another five million more. In a competitive market there are many very good options, but an increasing number of lenders with the potential to cause set-backs for you and your project. With so many options out there, how does a borrower find a lender who is the right fit for them? Beyond just the rate and fees offered, what should you consider when looking for a private lender?
Finding the right private lending partner, who offers speed and flexibility, can have a huge impact on a real estate investor’s bottom line.
The following are some things to consider and questions to ask when shopping for a private lender.
A Track Record of Success
With so many options when searching for private financing, it can be difficult to determine which lenders are reputable. Ask for references – a private lender worth their salt should be able to put you in touch with other borrowers for whom they have funded similar loans.
Look for a lender who knows and has experience in your market. Nationwide lenders may be a good fit for extremely large projects, but local lenders often have a better feel for their respective regions. This regional expertise can be a huge asset to a borrower and allow for more creative, better tailored financing solutions and better terms. An experienced, local lender can also be a valuable resource and sounding board when determining the feasibility of a potential project.
A Direct Lender
Confirm that the lender you are working with is a direct lender. Purported lenders who broker out your loan to other sources of capital can cost a borrower significant time and money.
In some cases, an upfront fee to a lender may allow a borrower to lock in a certain rate or be necessary to cover certain due diligence expenses, but be sure to read the fine print and determine the applicability of any upfront fees to the final loan fee. Beware of lenders that charge large upfront fees prior to even looking at your loan file.
Finding a private lender who is a great fit for you will have a major impact on the overall success of your project – to determine this fit it is necessary to look beyond just a lender’s rate and fees.
At Juniper Capital, we aren’t the right fit for every borrower or every loan, however, we have built a track record of success on hundreds of transactions across the Pacific Northwest. The Juniper team works with our borrowers every step of the way, from underwriting to loan servicing, and we don’t charge upfront fees. Contact us to start the conversation today. We specialize in private commercial real estate loans, hard money loans in the Pacific Northwest and more.