Cons of Private Money: What to Watch Out For


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Here are 3 cons of private money to keep you informed.

Private money (money from real people) is one of the most valuable tools a real estate investor can keep on-hand.

It’s flexible, it’s cheap, it’s easy… But finding and keeping lenders is the hard part.

Here are 3 cons to private money you should watch out for.

Cons of Other People’s Private Money

There are plenty of positives, but it’s wise to be aware of some potential trouble spots too:

  • It’s harder to find lenders. You can’t walk into a bank to get this kind of money; you just have to find the right individuals. Your OPM lenders don’t necessarily have to be millionaires, but they do have to have a good chunk of free money available for you. It can take time to find these people.
  • Keeping OPM lenders can be difficult. It’s takes a lot of time and attention to nurture your real private money lenders. You need to keep their money secure, pay them on time, and provide them with good opportunities. It’s best to have multiple OPM lenders available to you.
  • Finding other people’s money means selling the people on it. People who would most benefit from being a private lender might not even know what it means. If a doctor, dentist, teacher, etc is keeping their life savings in a bank account or IRA, then they might get a better return doing private lending. However, people outside of real estate might not understand how it works. It’s your job to explain how their money gets secured and how the process works.

The funding itself may be easier, faster, and cheaper, but with private money, finding and managing a relationship with a lender can be the hard part.

Just remember that anyone with money is looking for a stable return. If you can prove you’ll provide that, funding opportunities will start rolling in.

How to Get Other People’s Money

To avoid cons, how does the process work once you find other people’s money?

If you need help finding, attracting, convincing, or setting up an OPM lender, let us know. For the last 15+ years, we’ve raised millions and millions of dollars through OPM. Send us an email at with any questions.

Download our free real private money checklist here.

Read the full article here.

Watch the video here: