When you are looking for private money? Is there an upfront fee you need have to pay to get the funding? I was talking with a private lender from Cali and he wanted a small upfront fee. Is this common practice?
Unless this private lender is someone known and recommended by your local Real Estate Investor Association, I would pass. Some so-called “private lenders” make their money by charging upfront, non-refundable fees and then informing the borrower that they don’t meet their qualifications and so the requested funding is denied. What is your “spidey sense” telling you?
There’s a big difference between a hard money lender and a private lender.
A hard money lender charges a lot of upfront fees and points and high interest rates and some even charge a pre-payment penalty when you pay them off.
A private lender does not charge upfront fees or other ridiculous charges. Some private lenders will accept part of the profits with no monthly payments. Some will want monthly payments. They are much more flexible than a hard money lender.
However, the best private lender is the SELLER! Negotiate to buy with seller financing for the best terms and conditions.
Learn how to do deals which do not require borrowing money from others who are not involved in the transaction (buyer and seller). These are the best and most profitable deals.