Where to Find Borrowers for Your Private Lending Business

The following is adapted from This Sh*t Works.

Your success in private lending all starts with your network. As one of my colleagues at my real estate firm says, your network is your “net worth.” It’s the key to accessing opportunities, deal flow, and borrowers with whom you can create amazing success and profit.  

But for collaboration to yield positive results, it has to be done with the right people. You want borrowers who have a history of profitable investments, who work well with others, and who aren’t likely to default on their loans. How do you find them? 

You’ll attract the best borrowers not by letting prospects come to you, but by proactively seeking them out through your network, both online and off. 

Grow Your Network Online

You might have a solid network already, or you might be just breaking into the real estate space. In either case, start growing your network with new acquaintances and searching for borrowers online. 

Get connected with the real estate community and see what people are talking about. Look for real estate discussion groups and blogs. Don’t be afraid to ask your questions there, either. Online communities can be a great place to learn and get educated as well as access influential people. However, you won’t make connections if people don’t see you. 

You need to be active and garner visibility by commenting and asking questions on online articles. Check out real estate group pages on Facebook. If the page is a solid resource, they will share articles, videos, and live discussions. See who else has liked and consistently contributes to the page.

If you are able to write a post, share links to interesting articles with your comments. Make an effort to both contribute and receive information. After a while, you’ll meet influencers in the space who might be borrowers themselves, or able to introduce you to others. 

Attend In-Person Groups

Your next strategy, which can be even more effective than participating online, is to join and attend in-person real estate groups. 

Go to association meetings where real estate investors typically hang out. They network, they mingle. Find out who’s who, and who’s talking about the deals they’re doing. See who’s respected in that group and talk to them. 

Once you identify key players, take them out for coffee. Don’t be afraid to ask questions. Just because you’re bringing the capital into the deal doesn’t mean you have to know everything. Be frank with people and say, “I’m getting started doing this. I want to learn how to do it. I want to do it with people who have experience.” 

Even if these people aren’t borrowers themselves, they can likely introduce you to people they know. Referrals are always the best way to find team members or borrowers, so ask around. Who are the people who have a good track record, who’ve been doing this for a while, who have the respect of the group? Ask people.

Speak in Specifics

The other key component to finding the right borrowers, whether online or in person, is to speak in specifics about your goals. 

When you talk about lending money, be clear about what you are looking for. What size investments are you looking to make? What price points, what market, what area or geographic area? Are you looking to lend long term or short term? 

Those are some of the general criteria to establish so people who might want to do business with you know whether there is a potential fit. After all, someone could be an excellent experienced borrower, but if their needs don’t align with your own, they won’t be a good match. 

By speaking in specifics and being clear about what you want, you’re not wasting your time or theirs. 

Networking Requires Ongoing Effort

As you search for borrowers, know that it likely won’t happen overnight. Networking means building relationships organically. It takes talking to people one on one, learning what they do, and exploring those leads. 

Networking takes longer than inviting borrowers to come to you, but the work on the front end is important and so worthwhile. Don’t be hasty. Private lending can be an amazing opportunity and a great investment; it’s not worth trying to get the instant gratification and quick money. 

Take the time to network with the right people, communicate your goals, and find your ideal borrowers, and the return on your investments will be much higher for it. 

For more advice on real estate investing, you can find This Sh*t Works on Amazon.

Kent Clothier is the CEO of Real Estate Worldwide, a software training company for real estate investors, and the founder of the Boardroom Mastermind, the most elite real estate investor networking group in the country. He’s flipped thousands of homes over the past fifteen years and helped tens of thousands of people learn how to do the same. He is passionate about teaching what he’s learned in a simple way so that it’s easy for anyone to connect the dots. As a husband and the proud father of three amazing kids, Kent has built the ultimate life for himself and his family.