Don’t Forget Who Is Involved In A Private Money Loan

Investment Property Loan Exchange
Home Real Estate Investments Real Estate Investments Guides Don’t Forget Who Is Involved In A Private Money Loan

Don't Forget Who Is Involved In A Private Money Loan - Real estate investments

When looking for real estate funding through a private money loan, it’s not always obvious who will be involved in each step. A successful private money transaction requires all parties to know their responsibilities and obligations throughout the lending process. Let’s find out the parties involved:


Table Of Content:

  1. The private money lender
  2. The borrower
  3. The private investor
  4. The attorney
  5. The title company
  6. The escrow company
  7. The appraiser
  8. The loan servicer

The private money lender

Private money lenders are companies or individuals that can give you access to a loan. They guide all the other parties involved to help you close the loan. 

A private money lender will:

  • Research on you and the property.
  • Create your loan package.
  • Gather and review title information
  • Provide you with federal and state disclosures
  • Order and review an appraisal or other asset valuation for the property
  • Coordinate title and escrow services
  • Coordinate funds transferred from the private investors to the title or escrow company
  • Determine the loan servicer and transfer information at the end of the transaction to that servicer (if it isn’t the private lender themselves)
  • Create final loan documents
  • Coordinate loan settlement and/or closing
  • Providing and reviewing agreements between all parties
  • And more!


Real estate investment loans


The borrower

This is you, the real estate investor who wants funds for any residential or commercial real estate project. You, the private lender, and the investor are the people with the most stake in a deal. Your tasks will be:

  • Provide all necessary documentation
  • Explain your financial background 
  • Pitch your project and why you need the loan. 


The private investor

Indeed, money for your loan will come from them. In most cases, it will be an outside entity or individual with whom the private money lender has developed a relationship.


The attorney

An attorney specializing in real estate law can offer guidance on selecting the proper loan structure and ensure that all legal paperwork is completed following state laws, especially from New York, Florida, Texas, or Carolina. In addition, they’ll be able to review private money loan contracts and identify any clauses or terms that could be unfavorable to either party.


Get In Touch With The Real Estate Investor News Team If You Want To Know More About Buying And Financing Investment Properties

Contact Us Now


The title company

The title company compiles a title report for the property offered as collateral for the loan. They collect the info by searching county records for all information, liens, judgments, easements, etc., against the property as well as you and your related entities. The private money lender will use this report to determine if it is eligible for title insurance. If it is, the title company will make an offer to issue a title insurance policy, which binds upon the recording of the loan security document.


The escrow company

The escrow company is a neutral third party that collects and disburses the funds as directed by the private investor, oversees the final signing of all applicable deeds and loan documents, and records executed documents with the appropriate county office. It’s usually this company’s office where you and the private investor and/or private lender will sign the final loan documents, also called closing the loan.


The appraiser

The appraiser is a licensed professional who provides a report that includes an opinion of the value of the subject property. This report is for the exclusive use of the private lender. You may request to receive a copy of the report if you want to review it.

An appraisal is not always required for a private money transaction. In many cases, the private lender will visit the property and make the value assessment themselves. 


The loan servicer

This is the entity that collects your monthly payment. It may be your hard money lender, the private investor, or a third-party loan servicing company. The loan servicer is responsible for sending you statements, year-end tax reports on interest paid, and any escrow you pay toward taxes and insurance as part of your payment.


Real estate funding



The better you know the players and their roles, the more you can leverage their expertise and conclude a transaction that works best for you. If you have any questions about private money lending, or if you’re looking for a lender in Florida, Texas, Carolina, or another state, give us a call at RE Investor News. Our team of experts will help you find the best loan for your needs and ensure that everyone involved in the transaction is happy with the outcome.


Let Us Help You Boost Your Real Estate Projects!

Share your real estate investment projects with us and one of our team members will contact you with the right funding solution.



Damon Riehl

Damon Riehl
As someone who has been in the real estate industry for over 30 years, I am always excited to share the latest market updates with investors. Being informed and up-to-date on the latest trends and changes in the real estate market is essential for making the right decisions when it comes to investing in properties. That’s why I aim to provide insightful information to anyone looking to invest in the real estate market.