M
ike Gorius and Kevin Hart, real estate investors who have quit their W-2 jobs to pursue financial independence, opt for private money lenders (PMLs) despite higher interest rates. The main advantage of working with PMLs is speed, which allows them to close deals quickly. As of March 2025, mortgage rates are around 6.4%, but Gorius and Hart are willing to pay nearly double that rate to work with private money lenders.

    Gorius explained that there are three ways to borrow money in their industry: through a PML, a hard money lender, or a traditional lender. Traditional lenders offer the lowest rates, while hard money lenders tend to be the most expensive. Private money lenders typically charge interest rates between 10% and 12%, while hard money lenders charge between 11% and 13%.

    Working with PMLs allows Gorius and Hart to close deals quickly, often in a matter of days rather than weeks. They do their own inspections and don't require appraisals, which speeds up the process. The fastest they've ever closed on a deal was eight days.

    Gorius formed an official business partnership with Hart under the Joe Homebuyer franchise in 2024. When executing deals, they meet virtually with the seller, title attorney, and private money lender. The lender deposits funds into escrow, which are used to pay the seller and cover renovations. Once the rehab is complete, the new buyer pays the sales price, and the title attorney ensures the private money lender gets their initial investment back plus interest.

    To find PMLs, Gorius uses networking and cold calling. He starts by reaching out to contacts in his phone and then posts on social media and LinkedIn. In one post, he detailed a successful flip and was able to raise $280,000 from interested investors.