I can’t help myself—I hear the phrase “private money lenders” and the theme from the Sopranos starts playing in my head. I know that’s not true, not really how it works—it’s just a TV show, right? And Tennessee’s not New Jersey, anyway. Large amounts of private cash don’t come from the mob, they just come from certain, private, wealthy individuals. It’s fine. When I first started investing in Chattanooga, I even did it with a loan from a private money lender. No problem. But, that was a little different—she was my aunt.
But, at the volume of houses I buy these days, I need reliable access to steady streams of capital. So, rather than relying on the whims of whichever petty duke I have to flatter, I go to the Tennessee hard money lenders I’ve worked with before. They’re more predictable, they’re more reliable, and the worst they’ll do if you blow a deal is take the house themselves.
Private and Hard Money Lenders in Tennessee
Private money can come from anyone you can convince to front you the price of a house plus renovations. Usually, if someone’s getting a private money loan, it’s coming from family, a family friend, a friend’s family, or the friend of a friend. Private money rarely flows to strangers, without at least some sort of introduction. That means, if you don’t already have a good idea of whom to ask for a private home loan, you might not have anyone to ask. Try joining the country club.
So, while there are benefits to borrowing privately from someone you know—a potentially lower interest rate, no minimum credit score—there are drawbacks as well. Access is the first hurdle. After that, it’s handling their interest and attention. As long as you have their money, you are beholden to them. Maybe they call you every day to check up; maybe they show up at the property and start quibbling with you over renovation choices. How can you say no? Even if they’re getting paid in the end, they’re still doing you a favor. Failing to live up to these unspoken obligations—or your financial obligations—can make a very awkward Thanksgiving.
Beyond family and friends, private money can also refer to a Tennessee business that might lend you money as an investment for them. These types of private money lenders usually aren’t just in the business of just backstopping real estate deals, though. So, when they loan you money, yes, they’re expecting a return from it, but they could have had that anyway with any other investment vehicle. That’s why you’ll find some private money lenders here in Tennessee that are in business specifically to lend money—but they might not be interested in funding all your real estate investments.
Nobody ever quit their day job, flipped one house, and then rode off into the sunset. If you want to do this for real, you have to really do it: deal after deal, for years, even decades. Your private money lender may be willing to help you with the first deal, or few deals, but how long can you keep their interest in real estate? How tightly do you want your profession to be tied to their whims?
You need a private hard money lender who knows Tennessee real estate investing—and does it day in, day out. Their interest rates are higher than traditional loans, but since they know the value of the real asset you are investing in, they will focus less on your personal credit score. And, you’ll get financing terms that make sense for the type of investing strategy that you have for the property—and building your professional real estate investing business.
Here are a few reputable private hard money lenders in Tennessee that know their stuff and have the capacity to support your business deal after deal.
- Finance of America. This lender has a proven track record of funding real estate deals here in Tennessee and across the country with over 11,600 closed loans. If you want to buy, rehab, and sell a house, they can finance up to 90% of the purchase and 100% of the renovation. For your buy-and-holds, they’ll offer you an asset-based loan for up to 30 years with no tax returns or personal income necessary. If you have a good deal on your hands, you can receive funding that makes sense.
- Sherman Bridge Lending. When you have a hot lead, you need to move quickly—or someone else will close in on it. Sherman Bridge understands that. You can get pre-qualified in under a minute and even close in as little as seven days. And, since they only loan on residential investment property, they have the expertise to support your exit strategy, whether it’s to flip the house or rent it out.
- 5 Arch Lending. This lender brings a combined 100 years of personal experience to the table when financing your residential real estate investment. They know your challenges, keeping your needs front and center to smoothing the process for you. With 5 Arch, you can focus on getting your properties bought, rehabbed, and sold rather than a complicated funding process.
The biggest benefit of working with these private hard money lenders in Tennessee is that you know what you’re going to get. That certainty seriously adds up. You might do one great deal with another private lender, but it’s rare that you’ll still be doing deals with them ten years later. These guys, on the other hand, are a perennial, dependable resource when flipping houses anywhere in Tennessee.
Getting Private Hard Money Funding Even Faster—And More Simply
After one deal investing with my Aunt’s money, I knew I had to find a better way. So, I did some research and became an independently owned and operated HomeVestors® franchisee—the people behind the nationally-known and trusted “We Buy Ugly Houses®” marketing campaign. Doing so gave me access to qualified leads, that lead to purchase contracts that I could take to hard money lenders for financing. With reliable leads and reliable capital, I could commit to real estate investing in a way I never could have if I had to convince a family member to sign off on every deal.
That was years ago, and I’m established now, having done many deals in Chattanooga, several in Memphis, and even a few in Nashville. Being part of a national brand, and doing business with national lenders, allowed me to expand my horizons. And, getting the hard money to grow is easier than ever with HomeVestors’ new proprietary platform, UGVilleSM. All I have to do is enter the details of the deal on my iPad and, often within minutes, Tennessee private hard money lenders like the ones mentioned, send me their terms.
Ready to stop worrying about where to find private money lenders in Tennessee? To get the leads you need to deal with hard money lenders, request more information on becoming a HomeVestors® franchisee today!
Lenders in UGVilleSM are current as of posting. Each franchise office is independently owned and operated.