How Private Money Lenders Evaluate Real Estate Deals (with Cory Deeter)

Why this episode matters

If you’re a real estate investor, developer, or affordable housing advocate, sooner or later you will need to work with private money lenders. But how do they actually evaluate deals? What do they look for before saying “yes”?

In this episode of the Affordable Housing & Real Estate Investing Podcast, Kent Fai He sits down with Cory Deeter, a private money lender and real estate investor, to pull back the curtain on the exact process lenders use to analyze deals. Cory shares not only his successes but also mistakes and hard lessons learned, giving investors a rare look at what really goes into private lending.

What mistakes should investors avoid when approaching private money lenders?

One of the biggest mistakes Cory sees is people simply lobbing a deal over the fence with little effort. Sending a random email or Facebook message asking for money without a relationship or a clear presentation is a fast way to lose credibility.

Instead, investors should treat a private money lender like a bank. That means:

• Building a relationship first.
  
  

• Preparing a clean, professional deal package (not just a messy spreadsheet).
  
  

• Demonstrating you’ve done the underwriting and understand the risks.
  
  

As Cory explains: “Don’t just lob it over the fence to me. If I don’t have a relationship with you, I’m not lending to you.”

Is wholesaling really the best entry point into real estate?

Many people believe wholesaling is the quickest way to quit their job and go full-time in real estate. But Cory cautions that the hype often doesn’t match reality.

He points out that social media often shows $50,000 assignment fees, but rarely the behind-the-scenes struggles:

• Legal risks with cold calling and texting.
  
  

• Time-intensive systems needed for follow-up.
  
  

• The difficulty of finding real buyers who actually close.
  
  

For Cory, wholesaling didn’t fit his skill set. He’s more of a visionary than a systems operator, and juggling a W-2 job with wholesaling proved unsustainable. This insight is crucial for investors to recognize their own strengths and align strategies accordingly.

How can investors shift from wholesaler to buyer even without cash?

Cory’s turning point came when he realized he didn’t need to have all the cash himself to become a buyer. He found a seller-financed deal where the owner provided six years at 0% interest, which turned into a profitable mid-term rental.

His mindset shift:

• Focus on finding great deals first.
  
  

• Borrow entry fees or partner with others when the numbers make sense.
  
  

• Present the opportunity in a way that makes lenders want to participate.
  
  

As he puts it: “The big challenge for me was mentally getting over the fact that I don’t necessarily have to have the entry fee. I can borrow it.”

What lessons did Cory learn from short-term, mid-term, and long-term rentals?

Cory experimented with multiple strategies, from Airbnb arbitrage to flips to mid-term rentals. Not all went smoothly.

• Short-term rentals: His units near Houston’s NRG Stadium attracted problematic guests. One incident even involved a car being driven into the house. Lesson: location and tenant profile matter more than hype.
  
  

• Mid-term rentals: Performed much better, generating consistent $500–$1,000 monthly cash flow.
  
  

• Flips: Taught him about execution risk and the importance of having strong systems.
  
  

These experiences underscore that not every strategy fits every market. Investors should align their approach with location, clientele, and personal strengths.

What should investors look for in multifamily GP (general partner) deals?

Cory also participated as a GP in a large multifamily deal, which gave him firsthand insight into how these structures work. His key lessons:

• Always read the Offering Memorandum critically—operators will present deals in the best possible light.
  
  

• Verify assumptions on rent growth, expenses, and market fundamentals independently.
  
  

• Ask tough questions: What happens if cash flow falls short? Will distributions stop?
  
  

• Vet the operator’s current portfolio, not just past wins.
  
  

As Cory warns: “Ultimately the operator is the person that’s going to make or break the deal.”

Key Insights from Cory Deeter

• Relationships and professionalism matter more than flashy returns when raising private money.
  
  

• Wholesaling isn’t as simple as social media makes it seem—know if it fits your skills.
  
  

• You don’t need all the cash to be a buyer. Focus on the deal, and money will follow.
  
  

• Not every rental strategy works in every location. Vet your market and clientele.
  
  

• In multifamily syndications, the operator’s integrity and experience often matter more than the deal itself.
  
  

Best Quotes

• “Don’t just lob it over the fence to me. If I don’t have a relationship with you, I’m not lending to you.”
  
  

• “The big challenge for me was mentally getting over the fact that I don’t necessarily have to have the entry fee. I can borrow it.”
  
  

• “Your network and your reputation are absolutely critical in the lending game.”
  
  

• “I’m not interested in the Grand Slams you did years ago. I want to know what’s on your plate today.”
  
  

Common Questions This Episode Answers

How do I approach a private money lender the right way?
Build a relationship first, then prepare a professional deal package that shows you’ve done the work.

Can I invest in real estate without much of my own money?
Yes. If you find a solid deal, private lenders or partners will often fund the entry fee.

Is wholesaling worth pursuing?
For some, yes. But it requires strong systems, time, and tolerance for legal and operational risks.

What should I look for in multifamily GP deals?
Vet the operator’s track record and current capacity, not just the projected numbers in the Offering Memorandum.

Which rental strategy is best: short, mid, or long term?
It depends on location and clientele. Cory found mid-term rentals the most reliable in his markets.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.

DM me @kentfaiheon IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.