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.
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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/
Equal Housing Opportunity. This is not a Good Faith Estimate nor a Guarantee to lend and should not be considered as such. Costs, rates, estimates, and terms can only be determined after completing an application. Actual payments will vary based on your situation and current rates. APR for loans ranges from 7.99 - 29.5% and is based on Credit Score, Down Payment, LTV, and Income. Mortgage rates could change daily. For more accurate, personalized results, please call 623 582 4444 to speak with a licensed mortgage expert. Terms and conditions of all loan programs are subject to change without notice. NCO Enterprises LLC Dba Setabay Private Hard Money 26731 N 90th Drive Peoria, AZ 85383 Telephone: 623-582-4444 NMLS 2062278 NMLS 1118493 This email is for the exclusive use of the intended recipients and may contain privileged and confidential information. If you are not an intended recipient, please notify the sender, delete the email from your computer, and do not copy or disclose it to anyone else. Your receipt of this message is not intended to waive any applicable privilege. Neither this email nor any attachments establishes a client relationship, constitutes an electronic signature, or provides consent to contract electronically unless expressed by Matt Prosory, RI/CEO, in this email or an attachment. To the extent this message includes any tax or legal advice. This message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This email is an advertisement.
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Matt Prosory RI/MLO/Broker
It’s like a grade that predicts whether you might miss a mortgage payment soon. Lenders review your score to judge risk. (Does my credit score affect my ability to get a mortgage loan or the mortgage rate I pay?, 2024) A low score is like an F in school, making lenders nervous. Think of your credit score as a GPA for borrowing. If you’ve struggled with a mortgage, your GPA drops. Some have high GPAs, others have mixed grades. The credit “school” never ends, so keep your score as high as possible. How do you raise your credit GPA? The answer is similar to what you did in school:
Between 580 and 669
Matt Prosory RI/MLO/Broker
Dad was the son of a Swedish immigrant who decided to start a dairy farm in northern Wisconsin. My dad grew up milking cows every day and not having much fun. Back then, dropping out of school was common, and you were not looked down upon for stopping. My dad lacked an education, having never finished high school; he’d say, “Don’t need a high school diploma to milk cows.” 
Dad’s first home, which he purchased in California, was in Monrovia on Pamela Rd. He bought it in 1960 for some ridiculous low amount and too long ago to remember, but he sold it in 1972 for $11,000. Dad should have kept it and rented it out. Payments on the house were $29/month. Rents would generate around $100/month, a positive cash flow of $71. But for some reason, he thought he could not do it. It just did not make sense to Dad. He probably never thought of the idea or considered the possibilities.
Dad started fixing those damn TVs for Sears, and he was good at it; he became an expert. So good that Sears wanted him to teach others the skill of fixing those damns TVs. As a result, he received a promotion and more money, but one major problem was about to come back to haunt him – no high school diploma. Mom and Dad would talk about it at night in whispers; they would say, “Do you think Sears will find out? Will you lose the job?
This second home, a vacation property, was up in the mountains in Frazier Park, about 70 miles north of Los Angeles, in the middle of nowhere at the time. It was a nice cabin with two small bedrooms, a much bigger house than the house on Pamela Road. Two homes at the same time, a nice leap in financial prosperity.
the San Gabriel Foothills of Monrovia; purchased at the right time and with the right financing terms: a fixed 6% note. A bigger house, with views of the city lights, where all the rich people from the church lived. When the cabin was finished, he rented this property to move to the mountains. Good idea to rent the house. A very good positive cash flow, and the homes in the area were appreciating. The mistake here was making the mountain home his permanent residence. Mom always said, “It was a mistake moving here,” and she would say it often to Dad. However, he got cash fever and no longer wanted to rent it out, so Dad sold the house for $110,000 in 1979. A great investment: he netted around $90,000, quickly put it in the bank, and then began spending it on depreciable assets (cars). 
Fortunately, when he had to make the move to the fourth house due to mom’s illness, the house in the mountains appreciated in value. He realized his mistake of moving to the middle of nowhere, with no jobs, no income, and no medical facilities. The nearest hospital was 90 miles away down Interstate 5 – the “grapevine”. Dad desperately needed to move again. His final purchase was another mistake, a double-wide in Castaic, CA. He netted around $100,000 for the mountain house, but again started spending it on depreciable assets (cars) for himself and my sister.