In order to be successful in crowdfunding, you need to understand private lending from a few different perspectives. First, the private lending that we are discussing is for the purpose of finding, funding, and doing real estate transactions. No matter your individual situation or circumstances, it will help to see things from the perspective of not only of the private lender, but also of the borrower and of the people who help them prepare their paperwork.

It is appropriate to give you some background on the broad subject of private lending that you need to keep in mind as you develop your business. I am sure that you have been listening and learning and reading as much as you can about private lending. If not, you should be attempting to learn as much as you can about the subject. I want to make sure that when you are getting into this material, these perspectives are one of the first things that you are going to either read, hear or consider.

Private lending is the absolute key to unlocking the door to being able to do real estate deals, but you have to make sure that you are very careful in how you work with private lending. If you do it wrong, you will likely foul things up which will result into a host of problems and chaos.

What is the best way to find a private lender? A crowdfunding portal is essentially a marketplace where private lenders congregate to look for deals and compete with other lenders to fund deals. Crowdfunding portals make it far easier to find private lenders than ever before. Private lenders are always looking for deals to put their inventory, i.e. money, to work.

When a private lender finds a relatively easy method to access a continuously productive marketplace with quality deal flow, they will continue to “shop” there like they would at any other marketplace that serves their purpose. This crowdfunding marketplace allows them to readily put their money to work in a successful manner, and enables them to spread their risk among a number of deals. Why wouldn’t they return for more?

Outside of a Funding Portal, one of the safest and simplest ways to find a private lender is to use the tried and true method of telling your story to whoever will listen. Have a compelling, concise and well-rehearsed 25 to 30-second elevator speech explaining what you do in real estate and why you need private lenders for your deals. You can then steer these contacts to the Funding Portal or to your website.

Do not borrow money from immediate family, particularly if they live close by. Do not do it. Whatever the terms may be it will be the most “expensive” money you have ever borrowed, and not just in terms of dollars and cents. It can make for unpleasant dinner conversation at Thanksgiving dinner.

With crowdfunding, it may be a little easier to borrow from family as you will also have money invested by the crowd, but do not minimize the impact of taking family money for your project. Factor into your equation whether taking family money is really what you want to do.

Whether you are the borrower or the lender in any private lending transaction, think carefully about the terms and respect the people that are you are agreeing with to those terms. Make sure you understand each participant’s legitimate selfish reason for participating in the transaction, it will enable you to make the transaction smooth and seamless.