How To Find Private Money Lenders For Residential Real Estate Investing

For many private investors seeking to invest in real estate, the best option is to invest in assets being acquired and managed by a third-party, professional investment manager (called a “sponsor”). This can be in the form of a fund, for a single, specific investment, or a hybrid structure that combines existing assets with future acquisitions. Such investments have many advantages:

• The investor benefits from the experience of the sponsor, whose full-time focus is typically real estate investing, and who often has established operations run by a team of professionals.
• The cost of investing is typically known up front, and spelled out in contract in terms of manager fees, carried interest and other benefits.
• Investments can be made in a variety of asset types and sizes, and effective diversification is possible even for a smaller investor; investors can also make investments in structured products like senior loans, mezzanine debt, preferred equity or LP equity, each of which usually required specialized expertise and relationships, and can be difficult to invest in on a one-off basis.
• Depending on the scale of the investor’s investment relative to the overall fund or project, the investor may have the opportunity for meaningful input on decisions with respect to acquisitions, management, financing, and disposition of assets.
• At the same time, day-to-day management is typically a duty of the sponsor, and does not become a distraction to an investor’s other activities. This is especially important for a diversified manager, who may have more pressing responsibilities beyond operational management of real estate.

It can be tough to try to secure private lending for residential real estate if you do not know where to look.