Disciplined private lenders share one habit: they decide what they will lend on before a deal is in front of them. A clear set of criteria turns a range of opportunities into a short list of relevant ones and protects you from being talked into something outside your comfort zone.
Here is the framework worth writing down.
Geography
Which markets do you understand well enough to judge value and marketability? Lending where you know the area its price trends, its liquidity, how long properties take to sell is one of the simplest risk controls available. Decide your regions, and treat anything outside them as a deliberate exception.
Position
First or second mortgage? A first ranks ahead on repayment and is generally lower risk; a second sits behind existing debt and carries more. Many lenders set a rule (e.g., firsts only, or seconds only behind a known institutional first) and stick to it.
Loan-to-value (LTV)
Your maximum LTV is your margin of safety. The lower the LTV, the more the property value can fall before your capital is at risk. Set a ceiling and decide whether it flexes by property type or position.
Deal size
A minimum and maximum per loan keeps any single mortgage from over-concentrating your book, and screens out deals too small to be worth your time.
Target return
What rate (and fee structure) makes the risk worth it for you? Do you know where the market pricing is? Is your pricing market competitive?
Property and borrower type
Residential, commercial, land, construction? Owner-occupied or investment? Each has a different risk profile. Decide what you’ll consider.
Once your lending preferences are defined, the job of a good sourcing partner is simple: bring you only what fits, and leave the rest out.
AAREA’s role
We start by learning your parameters, then present only the opportunities that align so your time goes to decisions, not filtering. Once your loan preferences are defined, the right partner brings you only what fits. Share your parameters with AAREA geography, position, LTV, size, and target return and that’s all you’ll see from us.