Mortgage brokers like you know that getting money from traditional sources like banks, credit unions, insurance companies and Wall Street conduits is still extremely challenging. Underwriting standards change almost weekly, lenders come in and out of the market, and many renege at the last second even after issuing an acceptance. Private lenders, on the other hand, offer fast execution with predictable terms.

A private lender is an individual who wants to get involved in the real estate market without actually owning real estate. In exchange for requiring a healthy down payment and an above market interest rate, he or she will typically close a loan very quickly. In addition, many private lenders have relaxed underwriting standards. This lets them make loans on flip properties, rehab properties and other which may fail to meet a traditional lender's debt service coverage ratio requirement.

Most mortgage brokers' highly motivated clients are the hardest ones to finance. Typically, they have a great deal on which they can make anywhere from 30 to 100 percent return on their capital in a short period of time. Usually, these investments are houses needing rehab for quick resale at a much higher price or small 2-4 plex apartment properties for which they already have tenants. Today, getting a traditional loan would be challenging. However, having a private money connection lets you step in and help them close quickly. In addition, because the returns on the properties are so rich, paying the extra points and higher interest rate is not a problem for them.

Private money lenders are great partners for mortgage brokers in another way. Since they are single individuals or small groups, they cannot match the marketing muscle of the large lenders in your market. As such, they need you to find borrowers for them. As such, you can expect them to pay you a fair commission when the loan closes.

Mortgage brokers like you just want to close loans for motivated clients. Unfortunately, traditional lenders continue to make this extremely hard to do. If you are looking for quick execution, reasonable terms and fair compensation for your work, you need to have relationships with private money lenders.