Financing

How to get private money for a property with a recorded lis pendens

Securing private money for a property with a recorded lis pendens requires a clear understanding of the lien's implications and a solid plan to resolve it. Private lenders are generally more flexible than traditional banks, but they still need to see a path to clear title and a profitable exit.

October 22, 2026 · 4 min read

Understand what a lis pendens means

A 'lis pendens' (Latin for 'suit pending') is a formal notice recorded in the public records indicating that a lawsuit has been filed concerning title to a specific property. It means the property's ownership or use is in dispute, and anyone who acquires an interest in the property during the litigation does so subject to the outcome of the lawsuit.

For a private money lender, a lis pendens represents a significant cloud on title. It's a red flag because it means the collateral for his or her loan is at risk if the lawsuit is lost. You cannot get clear title until the lis pendens is removed or the lawsuit is resolved, which directly impacts your ability to sell or refinance the property.

Identify the nature of the underlying lawsuit

Before approaching any lender, you need to thoroughly investigate the lawsuit that led to the lis pendens. What is the nature of the dispute? Who are the parties involved? What is the likely outcome? This requires pulling the court records and potentially consulting a real estate attorney. This is not legal advice, and you should always consult an attorney.

For instance, is it a simple boundary dispute, a complex probate issue (see <a href="/learn/judicial-vs-non-judicial-foreclosure-states">judicial vs non-judicial foreclosure</a>), or a foreclosure action (see <a href="/learn/tax-lien-vs-tax-deed-states">tax lien vs tax deed</a>)? The less severe the dispute, the more comfortable a private lender might be. You need to present a clear picture of the risk and your plan to mitigate it.

Develop a clear strategy for removal

A private money lender will only consider financing if you have a credible plan to get the lis pendens removed. This might involve negotiating a settlement with the plaintiff, paying off a specific lien, or even filing a motion to expunge the lis pendens if it was improperly filed. You must show the lender how and when the title will be cleared.

Present a timeline and estimated costs for resolution. If the lis pendens is tied to a specific debt, for example, your plan might involve paying that debt at closing from the loan proceeds. This requires careful coordination with your title company and attorney. This is not financial advice.

Highlight the property's equity and your exit strategy

Private money lenders are primarily interested in the equity in the deal and your ability to execute your exit strategy. Even with a lis pendens, if the property has significant equity once the title is cleared, and your rehab and resale plan is strong, a lender might be more amenable. Focus on the numbers once the obstacle is removed. For <a href="/for/new-investors">new investors</a>, this is crucial.

Your presentation should clearly detail the After Repair Value (ARV), your projected repair costs, and your estimated selling price. Show how the lender's capital will be protected even if the resolution takes slightly longer than expected. Demonstrate that the profit margin is substantial enough to cover the added risk.

Seek out experienced private lenders

Not all private lenders are equipped or willing to deal with complex title issues like a lis pendens. Target lenders who have experience with distressed properties and legal challenges. These lenders understand that some of the best deals come with complications, and they have processes for evaluating the associated risks.

Be transparent from the outset about the lis pendens. Do not try to hide it. Presenting the problem along with your well-researched solution builds trust. A lender who deals in these types of situations will appreciate your honesty and preparedness. This is not financial advice.

Questions people ask

Will a title company work with a lis pendens?

Yes, a good title company will work with you to understand the lis pendens and help identify the steps needed to clear it. However, they typically will not issue title insurance until the lis pendens is resolved or a specific exception is made.

Can I get transactional funding with a lis pendens?

Transactional funding is typically for very short-term, clear-title transactions. A lis pendens usually makes a property ineligible for standard transactional funding due to the unresolved legal dispute and clouded title. It adds too much risk for a rapid, low-documentation loan.

How long does it take to remove a lis pendens?

The time it takes to remove a lis pendens varies widely. It depends entirely on the nature of the underlying lawsuit and how quickly it can be resolved. It could be weeks for a simple settlement or many months, even years, if the litigation is complex.

Will a hard money lender consider a property with a lis pendens?

Some hard money lenders might, especially if they are very experienced with distressed assets and you have a solid, attorney-backed plan for immediate resolution. However, most will require the lis pendens to be cleared before funding or will factor in a significantly higher risk premium.