Finding hard money lenders isn't really a mystery. At least it isn't a hard mystery to solve. You just need to get out there and take the right steps toward uncovering them. There are many different ways their investors, attorneys, accountants, insurance agents, etc., who are generally to locate hard money lenders or private lenders. When talking with other professionals, I tend to refer to my lenders as “private lenders” simply because not everyone is familiar with the term “hard money lender.” I have found most of my lenders by asking for referrals from others willing to help me because I do what I can to help them.
Some of my favorite people to ask are settlement/closing attorneys. They usually prepare the loan documents for hard money lenders and most attorneys will be able to give you at least one name. In fact, on a number of occasions the attorney whom I asked for a referral was a hard money lender themselves.
Accountants are also a good source for hard money lenders since they have clients who are sitting on a lot of cash and need to do something with it. In some cases, they even have clients who already hold paper. Such people are great to approach about lending money since they already understand the business of lending. They have either taken back paper upon selling a property or they have lent their own funds to someone.
Real estate paper is a very secure investment, and people who understand the business of lending don't mind doing real estate loans, especially when the LTV is low and the interest rate is high. If someone trusts their accountant enough to let them handle their finances, then a referral from an accountant should carry a lot of clout. Another method of finding hard money lenders is to write down the addresses of homes undergoing renovation.
With few exceptions, if I go to the courthouse with ten addresses to uncover the lender involved in each of these renovation projects, you will find that a private lender is funding at least one of them. Contact the lenders that you discover and get to know them, especially if they have already lent money on a home in an area where you want to invest.
Insurance agents who sell hazard insurance policies (particularly those that specialize with investment properties) have to put a “loss payee” on all of the policies where a lender is involved. The loss payee is the lender, so the insurance agent can tell who are private lenders and which ones are not. An active agent could probably go through their records and come up with dozens of names of people who have lent money privately on policies they have written.
Mortgage brokers can also be a good source for locating hard money lenders, particularly those that work with investors on a routine basis. I personally feel that any mortgage broker that deals with investors should have a hard money lender in their bag. If they don't, I wouldn't consider them a good mortgage broker. You may have to pay the mortgage broker a fee for the referral, but it is worth it if it means getting a deal done. Increasing your chances of finding a hard money lender has to do with the circles that you run in, the people whom you ask, and the number of people you ask.
Chances are if you are asking the cashier at your local convenience store if they know of any hard money lenders, the answer you get is going to be, “Huh?”. If you ask an attorney or title company who works with a number of investors in your area, it is much more likely that you will find someone who will be able to provide you with the names of several lenders. If you don't get anywhere the first time, don't stop asking people until you find one.