Raising Private Capital for Real Estate Deals

Banks take 30-45 days to close. They want tax returns, pay stubs, credit scores above 700, and a personal guarantee. They send an appraiser who has never flipped a house to determine if your deal makes sense. Then they say no because the property is in too rough a shape to meet their lending guidelines.

Private lenders close in a week. Sometimes faster. A private lender is an individual with capital sitting in a savings account earning 4% who would rather earn 8-12% secured by real property. They don't care about your W-2. They care about the deal.

The flexibility matters more than the speed. A bank won't lend on a property with a condemned notice. A private lender who trusts your track record will, because they understand the after-repair value and they've seen you execute before. Banks use rigid formulas. Private lenders use judgment.

Your pitch to a private lender isn't "give me money." It's "I have an investment opportunity that pays you X percent, secured by a first-position lien on real property worth Y." That reframe changes everything. You're not borrowing. You're offering.

FlipMantis underwriting reports make this conversation concrete. Pull the property, run the numbers, and you have a professional document showing the ARV, repair scope, projected timeline, and return on investment. Hand that to a potential lender and they're looking at data, not a napkin sketch. The underwriting tool calculates their return at different interest rates and loan amounts so you can show exactly what they'd earn.

Start with one lender and one deal. Deliver the return you promised, on time. That lender will fund your next five deals without you having to ask.

Your first private lender probably already knows you. They're not some stranger you cold-call. They're a family member, a friend, a coworker, a dentist, a small business owner. Someone with retirement savings or liquid capital who mentions that their money isn't doing anything.

Write down everyone you know who might have $50,000 or more sitting somewhere. Parents, aunts, uncles. Former colleagues. Your accountant. Your doctor. The guy who sold his plumbing business last year. This list is longer than you think once you start writing.

You don't lead with "I need a loan." You lead with the opportunity. "I buy distressed houses, renovate them, and sell them for a profit. My investors earn 8-12% annually, secured by the property. I thought of you because I know you mentioned your savings aren't earning much right now."

Some will say no. That's fine. Some will say "tell me more." That's your opening.

REIA meetings are the other goldmine. Experienced investors who've slowed down on active investing often want to deploy capital passively. They already understand the business, so the education phase is skipped entirely. Buy them coffee and talk numbers.

Inside FlipMantis, tag your lender contacts with the "private_lender" or "hard_money_lender" contact type. Track their lending preferences: maximum loan amount, preferred return, geographic focus, property types they'll fund. When a deal comes in that matches, you know exactly who to call.

The contacts hub stores every conversation and every deal you've done together. When lender number two asks "who else have you worked with?" you can show a track record backed by real data, not memory.

Three structures cover 90% of private lending deals. Straight interest, points plus interest, and equity participation. The right one depends on your lender's goals and how much profit the deal generates.

Straight interest is the simplest. The lender gives you $150,000 at 10% annual interest. You pay interest-only monthly or at the end of the project, plus the principal at closing. The lender knows exactly what they're earning. No surprises. This works best for fix-and-flip projects with a six-to-nine-month timeline.

Points plus interest adds an origination fee. Two points on a $150,000 loan means the lender collects $3,000 at funding plus monthly interest. This compensates the lender for the risk of shorter deals where the interest alone doesn't add up to much. A three-month flip at 10% only generates $3,750 in interest. Adding two points brings the total return to $6,750, which makes it worth the lender's time.

Equity participation means the lender shares in the profit instead of (or in addition to) interest. "You fund the deal, I manage the project, we split the profit 50/50." This works when you don't have a track record yet and the lender wants upside, or when the deal has unusually high margins.

Always secure the loan with a promissory note and a deed of trust or mortgage recorded against the property. The lender holds a lien. If you default, they can foreclose. This protection is what separates private lending from an unsecured loan between friends, and it's what makes sophisticated lenders comfortable.

FlipMantis underwriting lets you model each structure. Plug in the loan amount, rate, points, and project timeline. The calculator shows the total cost of capital and your net profit under each scenario. Run all three and present the lender with options. Most pick straight interest. Some prefer the higher return of equity deals. Let them choose.

Get a real estate attorney to draft your note and deed of trust. Template documents from the internet miss state-specific requirements. A $500 attorney fee prevents a $50,000 problem.

Trust is the currency of private lending. The fastest way to erode it is to take someone's money and then go quiet for three months.

The FlipMantis Lender Portal gives your private lenders a window into their investment. They log in with a secure token link and see exactly where the project stands. No phone calls. No chasing you for updates. No wondering if their money is being handled responsibly.

The portal shows the lender their deal summary: property address, loan amount, interest rate, projected timeline. Below that, the project timeline with milestone updates. Demolition complete. Rough plumbing inspected and passed. Drywall going up this week. Each update can include photos so they see physical progress.

Draw schedules appear on the portal as well. If the lender is funding in stages tied to milestones, they can see which draws have been released, which are pending, and what work needs to be completed before the next one. This level of transparency is rare in private lending and it's what separates you from every other borrower asking for capital.

Documents live in the portal too. The lender can access their promissory note, deed of trust, insurance certificate, title commitment, and inspection reports. When tax season hits, they don't have to dig through email. It's all in one place.

Set up the portal before you fund the deal. Walk the lender through it during your pitch. "This is where you'll track everything. You'll never have to wonder what's happening." That sentence alone has closed more lenders than any interest rate conversation.

Lenders who feel informed and respected bring you more deals. They also refer other lenders. One great portal experience creates a pipeline of capital that scales with your business.