Smart Private Money Solutions for Los Angeles House Flippers
We offer 100% financing with no monthly payments
What We Do
At Private Lending Direct, we offer 100% Fix & Flip private money loans in Los Angeles and North Orange County, California. We will fund 100% of your purchase price and, at your choice, allow you to defer all your monthly payments until you sell your property. We’ve been a Direct Private Lender, AKA Hard Money Lender, since 2010.
About Us
We are Jeff Smallowitz and Ellen Mabeus, husband and wife owners of Private Lending Direct, LLC. Since 2010 we have been providing purchase money loans to experienced house flippers in Los Angeles and North Orange County, CA. Our business is highly personalized, and we only extend loans to individuals we have previously met and come to know – even just a little. Trust holds significant importance to us.
You could call us direct private lenders, as we exclusively loan our hard-earned funds. Some might prefer family office or private lender, even referring to us as hard money lenders. Take your pick. It really means we do not operate a syndicated fund, accept investors, or sell our loans. Nor are we affiliates or correspondents to any outside financial resources. Consequently, we set our own terms and rules only guided by the market and the law.
Licensing and Professional Affiliations
We are licensed Finance Lenders through the California Department of Financial Protection and Innovation with license number 60DBO 44629.
We are happy to help you do an evaluation of your flip. Free, no charge, no obligation, and even if you get your loan elsewhere. Knowledgable borrowers are our best borrowers and we know you’ll be back.
Our focus on education is key to your success and we are committed to providing you with the best advice and support possible. We are confident that our expertise and resources will help you achieve a fair profit.
Unlike other private lenders, if we believe you won’t make a fair profit, we won’t make the loan, and will likely recommend that you don’t do the deal.
Have a Project in Mind?
Expand Your Business with a Private Lender
As private lenders, we are particularly proud that we have enabled many rehabbers to expand from just a few flips per year to dozens. Lots of lenders claim to value their relationships. That is, until you have an issue and need an accommodation.
We’ve personally flipped houses and know that no project goes smoothly. Even our most battle-hardened borrowers get surprised and know they can always come to us to work out most issues.
Our 3-Day Loan Process
- After a short phone call, we will get together for breakfast or lunch to get to know one another and perhaps look at a few of your properties.
- Once you find a deal, the clock starts and we will perform an ARV valuation using available comps.
- We will meet you at the property to do an inspection and verify your rehab estimate.
- You will provide your purchase contract, title prelim, and escrow instructions.
- We will obtain loan documents through our lending attorney.
- You will sign the loan docs and provide evidence of fire and hazard insurance.
- We will originate the loan through escrow and title and wire funds to your title company.
- Funding will be at 90% of your purchase price for your first loan and 100% for each loan thereafter. At your choice, you may defer payments until you sell.
- Once you find a deal, this entire process takes around 2 to 3 days.
- Fast, Easy, Reliable. Not bad, eh?
Frequently Asked Questions About Our Private Lending Criteria
To request our complete lending criteria, please click here to send us a message:
Our Rates and Terms
What Interest Rates do you charge?
We charge 11% simple interest plus 2 points. We don’t change our rates based on sizing you or your deal up or what we think we can squeeze out of you. No BS. Our rates are fixed. This helps you make competitive offers since you will always know what we charge.
Can I really defer all points and monthly payments?
YES. At your choice, you can pay everything (points and payments) when you sell. Here you are borrowing the money so we will add any unpaid amount to your principal balance and charge interest on that.
On a 6-month $750k loan, the extra interest will total approximately $1500. This helps with your cash flow and enables us to keep our money working. Win-Win.
Will you really lend 100% of my purchase price?
YES. On your first deal with us we will loan 90% of your purchase price. On your second deal forward we’ll loan 100% of the purchase price. Most rehabbers like this.
Are there any pre-payment penalties or minimum loan duration?
No pre-payment penalties. No minimum loan duration.
How fast must I pay you back? Can I get en extension?
Six-month note but to be honest, some deals take longer. As long as your property taxes and insurance are current and we’re comfortable with your progress, we’ll grant a six-month extension for free, and you can continue to pay or accrue interest. We only loan our own money and don’t have to answer to anyone or maintain a specific ROI. After a year, we will charge one additional point against your current loan balance for another six-month extension, provided all conditions are met.
Property and Valuation
How do you define a good deal?
We define a good deal as one in which you will earn 12 to 15% of the ARV on your flip.
To achieve this, your purchase price plus rehab estimate should total no more than 75% of the ARV. This works on properties with an ARV greater than around $250k. Below $250k, use 70%.
Where do you lend?
Since we will visit every property with you, it should be located within about 1 ½ hours of LAX. This includes the SFV, all of LA County out to just past I-15, and North Orange County.
What do you lend on and what do you avoid?
We are generally fearless. Bad foundations, mold, asbestos, substandard, and fire damage are ok so long as you have an engineering/remediation plan and a contractor estimate. We’ll lend on SFR’s, MFR’s, and condos. Nothing industrial or commercial. Historic homes typically defer your budget and schedule to a nameless, faceless, uncaring committee. We have too many unfortunate stories to lend on these.
Similarly, we don’t do refinances since there is always a story associated with them and it’s never good.
What are your insurance requirements?
In addition to lender’s title insurance, you will be required to obtain a replacement value hazard/fire insurance policy which includes a builder’s risk and vacant premises endorsement naming us as the mortgagee. A standard homeowner’s policy will not cover these.
Do you require an appraisal?
No. We perform our own valuations though we will always ask you to show us yours. This is one reason we can fund quickly.
Our Lending Process
How fast can you fund?
Because we do our own valuations, we typically fund in 2 to 3 days, but we have also turned loans around in 24 hours. We can move fast so long as we physically see the property and that you have a good deal with which you will earn a fair profit. We can say yes in the driveway then and there and have never backed out of a loan we committed to – ever. No cold feet.
Do you require a personal guarantee?
Yes. We are not crazy. Since these loans require little to no money out-of-pocket, all partners and/or entity members will be required to sign a personal guarantee.
Do you lend the rehab money?
We do not currently make rehab/construction loans. You are welcome to either use your own money for this or borrow it as a second position loan.
Do you ask for up-front fees?
NO. NEVER. Upfront fees are the surest sign you are being scammed. Before we ever make a loan to you, we will meet you personally so you know who we are and so we know you. We do not do business anonymously off the web. You shouldn’t either.
No funny business. No BS.
How Do I Qualify
Must I have prior house flipping experience?
Yes. We only lend to experienced house flippers who are in real estate full time. You must establish that you have flipped at least 3 homes locally within the past 2 years.
Will you pull my credit or ask for tax returns?
No and No.
Until someone convinces us that either of these show you know how to flip a house and pay us back, we will not be asking for credit reports or tax returns.
We will ask you to show us that you have the rehab money and any money for the down payment, as applicable. This will usually mean a discussion with, and evidence from, your rehab lender (who should want to talk to us anyway) and/or a bank statement from you, as appropriate.
Is it OK that I have a recent foreclosure or bankruptcy?
No. Recent foreclosures or bankruptcies are not OK.
Schedule a Call or Send Us a Message
Send Us a Message
Schedule a Call
Jeff Frequently Speaks and Writes about Private Lending
How to Lend and Borrow Private Money.
Safe Lending Practices from a Private Money Lender.
Private Lending Direct, LLC
P.O. Box 992
Redondo Beach, CA 90277
California Department of Financial Protection and Innovation Finance Lender License Number 60DBO 44629.
