As a real estate investor, it’s extremely advantageous for you to find a good private lender and build a solid relationship with them. There are a lot of factors to consider when choosing a private lender to work with, but to choose the best private lender for you, you should start by focusing on the factors that matter most to you.
For example, if you are looking forward to the opportunity to absorb some of your lender’s knowledge and experience, then focus on finding ones that have a considerable number of investment transactions under their belt, and a background with the types of investment properties you’re interested in.
Another factor to consider is the lender’s presence and availability. It may sound obvious to say that your lender needs to be available, but there are thousands of private lenders who don’t consider “lending” to be their full time job. Many private lenders work demanding full time jobs or take numerous long vacations throughout the year. It’s truly not unusual for a private lender to be busy, unavailable, or even out of the country entirely. This isn’t an issue for the right type of real estate investor, but an absentee lender can impede the progress of a deal, causing transaction delays that could cut into your profits. So be sure to choose the best private lender according to their availability.
Regardless of a lender’s general availability, it’s definitely important to ensure that they are dependable. If you feel that you can’t count on your lender to keep you informed, fund quickly, and be proactive, especially when a deal is hanging in the balance, you’re taking a bigger risk than you need to. A lender’s poor performance can cause you to miss out on a lucrative opportunity, cost you thousands of dollars in a lost deposit, or both! In short, definitely keep dependability in mind as a factor when it’s time to choose the best private lender for you.
The good news is that there are plenty of full time professional private lenders; they are typically very experienced with every facet of investment property transactions and real estate investing, they prepare and review all transaction paperwork personally, and they are proactively representing your best interests throughout the entire transaction.