11/21/2025
Private Money Lenders Are Losing Their Shirts Right Now — Here’s How to Keep Yours.
I came across a powerhouse post from my friend Ella Ray (shared with permission), and she nailed something I’m seeing every single week behind the scenes:
Private lenders are getting wiped out because they trusted the wrong people, weren’t secured, or had no idea what questions to ask.
Here’s my version, with a few extra nuggets from the double-close side of the world:
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🔥 15 Non-Negotiables Every Private Lender Should Live By
(You want to protect your money? Start here.)
1️⃣ Get your OWN Transaction Coordinator.
Never rely on the borrower’s TC — they don’t work for you. You need someone whose ONLY job is securing your money and catching red flags.
2️⃣ Vet your TC like your money depends on it.
Ask them what kind of deal structure it is. Ask them to walk you through risk points.
If they can’t explain it, they can’t protect you.
3️⃣ If a TC is getting a finder’s fee from the borrower AND securing your money… run.
That’s a conflict of interest the size of Texas.
4️⃣ Paper doesn’t protect you without equity.
Notes, mortgages, PGs… they’re worthless if the property is over-leveraged.
5️⃣ Underwrite the property yourself — AS-IS, today.
If you ever have to foreclose, ARV fairy tales won’t save you.
6️⃣ Not enough equity? Demand cross-collateral — and make sure it’s deeded correctly.
7️⃣ Only lend when there’s at least 2× the equity relative to the loan.
You’ll have legal fees, holding costs, repairs, and time. Build that in.
8️⃣ If you get an appraisal, make sure it’s AS-IS — not someone’s “dream after pics.”
9️⃣ Verify the underlying debt.
You can’t rely on equity that doesn’t exist.
🔟 Promissory note WITHOUT a recorded mortgage/deed of trust?
That’s not a loan — that’s a donation.
1️⃣1️⃣ Demand a CURRENT title commitment.
Not last month. Not last quarter. Today.
1️⃣2️⃣ Make sure the insurance policy actually protects YOU.
If the property burns down and you’re not listed on that policy, your money goes up in smoke too.
1️⃣3️⃣ If anything feels rushed, pressured, or fuzzy — slow down.
Ask questions. Review everything. Trust your gut.
1️⃣4️⃣ Never lend without seeing the original signed contract.
Especially on Subto. No contract = no protection.
1️⃣5️⃣ And lastly… NEVER send money outside of escrow. Ever. Ever. Ever.
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🎯 Bottom Line
If you follow nothing else…
#1 and #2 will save you from 99% of lender horror stories.
Big thank-you to Ella Ray for sparking this conversation and giving me permission to expand on it.
If you’re a lender and want help securing your deals the right way, message me.
— Melissa, The Double Close Pro
