Financing

What loan documents do private money lenders require?

Private money lenders typically require a set of documents focused on the property, the deal structure, and your experience as an investor. Being prepared with these documents upfront can significantly speed up the funding process for your real estate transactions.

October 16, 2026 · 3 min read

Property-specific documentation

The property itself is the primary collateral for a private money loan, so lenders need detailed information about it. This includes a current appraisal or a detailed comparative market analysis (CMA) that justifies the After Repair Value (ARV). He or she will want to see how you arrived at your valuation.

You will also need to provide photographs of the property, especially showcasing its current condition and any areas needing repair. A scope of work outlining the planned renovations and a detailed budget for those repairs are also standard requirements.

Your investment experience and financial capacity

Private money lenders assess your ability to execute the project. They will often ask for a resume or a track record of your past real estate investment projects, detailing your experience with flips, wholesales, or rentals. This helps him or her gauge your expertise.

While not as strict as traditional banks, some lenders might request a personal financial statement or proof of funds for your down payment and closing costs. This demonstrates you have skin in the game and the capacity to cover your share of the deal.

Deal structure documents

The core of the deal is communicated through the purchase and sale agreement for the property. This document outlines the terms of your acquisition from the seller. The lender needs to see this to understand your cost basis and the agreed-upon price.

If you are wholesaling, the assignment contract to your end buyer will be critical for transactional funding. For other strategies, he or she will review your proposed loan terms, including interest rates, repayment schedule, and any equity participation.

Proof of ownership and title information

A title commitment or a preliminary title report is essential. This document shows the chain of title, identifies any existing liens or encumbrances, and confirms that the seller has the legal right to sell the property. The lender needs clear title to secure his or her interest.

For the closing, you will need the deed transferring ownership to you (or your entity) and a recorded mortgage or deed of trust that secures the lender's position against the property. This legally protects his or her investment.

Required disclosures and legal forms

Expect to sign a promissory note, which is your formal promise to repay the loan under specified terms. This is the legal instrument that obligates you to the debt.

You will also sign a mortgage or deed of trust, which is the document that places a lien on the property, giving the lender the right to foreclose if you default. These are standard legal protections for the lender.

Questions people ask

Do I need a perfect credit score for private money?

Private money lenders generally focus more on the deal's viability and your experience than on your credit score, though a very poor score might still be a concern.

What if I am a new investor with no track record?

New investors can still get private money, but you might need to bring a stronger deal, partner with an experienced investor, or put down a larger deposit to mitigate the lender's risk.

Is an appraisal always needed?

Most private lenders will want some form of property valuation, whether a formal appraisal or a detailed BPO/CMA performed by you or an agent, to protect their investment.

Will private lenders fund closing costs?

Some private lenders will fund a portion of the closing costs, but you will typically need to cover some of these expenses yourself. It depends on the lender and the deal.