By Matt Prosory Broker/RI 623-582-4444
NMLS 118493 AZMB 2062278
June 8, 2026 

Most real estate investors depend on Private Money to help fund their deals, usually through private money loans.

But where can you actually find this steady source of funding? Institutional loans often take a long time and can slow down a residential redeveloper’s progress.

The main questions investors ask are how to find a private money lender in Arizona, how to convince them to lend you the Money you need, and how private lender financing actually works.

Having access to real estate investment capital helps investors grow their businesses over time.

Below are the key things you need to know about private lender loans. Understanding these points will help you prepare for the process and make you appear more credible to potential lenders.

How to Acquire a Private Lender Loan

Private lender loans differ from traditional bank loans. Getting a private lender loan is not the same as getting a traditional bank loan. The process is different, too. We underwrite and fund a loan in as little as 7-21 days. Banks can take up to 90 days to accomplish the same thing. (Geraci, 2025) The timeframe offered by an Arizona private money lender is generally conducive to the deals a typical investor wants to finance.

Asset-based Lending: Private lenders focus mainly on the value of the property itself. This means you don’t have to depend on your credit score to get a loan. (Team, 2025)

Control & Profitability: When you use private Money, you have more control over your loan and don’t need to bring in equity partners. (Geraci, 2025)

Shorter-Term Loans: Private money loans usually have shorter terms than traditional loans, which can help you avoid late penalties. (Hayes, 2026) Guarantee of Capital: Private capital provides borrowers, especially independent investors, with a reliable way to grow their businesses. Having a steady source of funds is key for this.  

Understanding Private Loans

At Money and experience are the two most important things a private money investor needs. The best private lenders in Arizona usually have a solid real estate background and a history of finding good lending opportunities. Even more important, they tend to focus on local markets, since knowing the area well is crucial for success. (Geraci, 2025) Understanding where a market is headed is a valuable skill. Your Private Lending Business: Determining Deal Viability

Private lenders want to make Money, so managing risk is very important to them. Here are eight things they look at to decide if a loan opportunity is worth it:

• Market Value
• Borrower Credit
• Borrower Equity
• Additional Collateral
• Lien Priority
• Pricing Strategy
• Exit Strategy
• Due Diligence

You should consider all these factors before deciding to go after a loan opportunity. If you skip due diligence or ignore any of these points, you could face serious problems. Take your time and handle the process carefully.

Proper Documentation

Having the right paperwork for a private money loan is very important. Many people don’t realize that the documents for an Arizona private money loan are similar to those for a regular loan. You’ll need to sign a promissory note, a written promise to repay the loan, and a mortgage, which serves as collateral for the lender. For residential loans, you might also need an outside appraisal, a property inspection report, a geology inspection, and your financial records. Most private money lenders also want to see the property in person, which is why they usually focus on local deals. (Hard Money Loans Arizona | Hard Money & Private Money Lender, n.d.) A hard money lender’s requirements may vary; standard documents are associated with every transaction. Typical loan documents include, but are not limited to:

Letter of Intent (LOI): A formal document that acknowledges that all parties are on the same page. It outlines an agreement between two or more parties before the deal is finalized. While it is not legally binding, it is a preventative measure for miscommunication.

Purchase & Sale Agreement: The purchase and sale agreement, or P&S agreement, is the document issued after both parties accept an offer that sets the final sale price and all purchase terms. Some items covered in the P&S agreement include the final sale price, earnest money details, closing date, title condition, contingencies, and more. Inclusions on the P&S contract will differ from state to state.

Preliminary Title Report: A title is a legal document listing the history of ownership of a home. After the buyer and seller have reached mutual acceptance, an attorney or title company will review the home’s title to look for any problems that might prevent the home from being legally sold. The results are written up for the buyer in a preliminary title report. A description of this nature will reveal if anyone other than the seller has a legal claim to the property.

Title Insurance: Title insurance, as its name suggests, is a preventative measure that protects a buyer from anyone who challenges a property’s ownership.

Proof of Funds: It represents a buyer’s intent. It is a way for borrowers to demonstrate they have sufficient funds to complete a transaction. Typically, a bank statement, retirement account statement, or other legal form is acceptable.

Proof of Insurance: Proof of insurance is required for either a purchase or refinance to avoid a devastating loss.

Personal Guarantee: A personal guarantee requires the borrower to put some skin in the game. In other words, the borrower puts their assets (real estate, savings, etc.) on the line. Of course, this applies only when the borrower can’t repay the loan.

Mortgage Note: A mortgage note is a promissory note secured by a mortgage loan. The loan structure is agreed upon, and the borrower signs the document.

Legal Documentation

A traditional one-page form note and two-page form deed of trust no longer address the myriad of issues in today’s legal environment. Environmental problems, lending issues, and the enforceability of securities and protections must be addressed. (Arizona Association of REALTORS®: Seeking Real Estate Investors? Compliance with Securities Laws is Critical., 2020)

Legal documentation should be consistent with institutional lenders’ employment practices, eliminating only provisions that may not be relevant or unnecessary. Additionally, special consideration must be given to a well-drafted broker’s affidavit, especially in states where a licensed real estate broker must broker an otherwise unethical loan.

Summary

Private Money can help investors fund deals when they don’t have enough from traditional loans or their own cash. Private lenders are willing to lend if you can show that your investment will be profitable. You’ll need to have the right paperwork to prove your deal is solid. If you do your homework and pay attention to details, you’ll be close to getting your next private money loan in Arizona.

Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Telephone: 623-582-4444
NMLS 118493 AZMB 2062278

References

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Team, L. (2025). How Hard Money Asset-Based Lenders Work. LegalClarity. https://legalclarity.org/how-hard-money-asset-based-lenders-work/

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Hayes, C. (2026). Real Estate Private Loans: Short-Term Financing Options and Trade-offs. Smarter.com. https://www.smarter.com/so-smart/real-estate-private-loans-short-term-financing-options-trade-offs

Bachas, N., Kim, O. & Yannelis, C. (2021). Loan Guarantees and Credit Supply. Journal of Financial Economics 139(3), pp. 872-894. https://doi.org/10.1016/j.jfineco.2020.08.008

(n.d.). Hard Money Loans Arizona | Hard Money & Private Money Lender. Metro Private Lending. https://metroprivatelending.com/

(April 21, 2020). Arizona Association of REALTORS®: Seeking Real Estate Investors? Compliance with Securities Laws is Critical.. Arizona Association of REALTORS®. https://www.aaronline.com/2020/04/22/seeking-real-estate-investors-compliance-with-securities-laws-is-critical/

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