Realtor Referral Fees on Private Money Loans

Realtor referral fees on private money loans are a second paycheck on deals you already have. If you work with investors, some of those buyers are already using private money. Refer that loan, or place it with a private lender when you are allowed to, and the fee can sit on top of your commission. You do not need a new lead source to do it.

Prefer the dedicated watch page: Watch the video.

The revenue is already in your investor book

Most agents hear “extra income” and picture a new marketing plan. This is the opposite. The video is aimed at realtors who already represent investors. Those clients buy rentals, flips, and small multifamily. Many of them never use a bank for the purchase. They use private money: a lender that funds the deal on the property and the exit, not on a W-2 and a debt-to-income ratio.

You are already in that transaction. You wrote the offer, and you will earn a commission if it closes. The loan is a second transaction next to the sale. If you ignore it, the buyer finds a lender alone and you get paid once. If you refer it, or place it with a private lender, a referral fee can sit on top.

No extra open houses. The work is a conversation with a client you already know.

What “on top of commission” means

Keep the two paychecks separate in your head.

• The commission is what you earn for representing the buyer or the seller on the real estate contract. That does not change.
• The referral fee is compensation for the loan, paid by the private lender when the program and your brokerage allow it. It is not a cut of your commission.

A buyer-side agent on a flip can close the purchase and also be the person who connected the private-money loan. A listing agent can do the same when the buyer is an investor using private money and the seller’s side introduced the lender. The sale still pays the commission. The loan can pay the referral.

We do not publish a flat fee in this video, and you should not quote one to a client until you have terms in writing. Ask the lender what the referral pays on that file. Then clear it with your broker before you agree.

Two paths: refer the loan, or originate and place it

The video gives you two options. Pick the one your license and your brokerage actually allow.

Refer it. You introduce the investor and the property. Jaken Finance Group takes the application, underwrites the deal, and funds the loan. You stay the agent on the purchase or sale. This is the lower-friction path for most residential agents. Join referral partner once so the next investor file does not start with a cold introduction.

Originate it, then send it. If you are licensed to take a loan application, you can originate and place the loan with a private money lender. That path brings licensing and brokerage rules with it. If you are not set up to originate, use the referral path and let the lender originate.

The video’s first step is simple: ask the lender you already use what a referral looks like on business-purpose investment loans. If that lender does not pay one, send the file to a lender that does.

Consumer loans are off limits

This is the line the video draws, and it is the line that matters.

This does not work for consumer loans. A consumer loan, in the video’s words, is a loan for a property someone is going to live in. Owner-occupied purchases and refinances follow a different set of rules. Federal rules restrict fees for referring consumer mortgage business, and brokerages add their own bans. On a home your client will live in, your pay is the commission. Do not ask for a lender referral fee on that file.

This only works for business-purpose, non-owner-occupied investment property. The buyer will not live there. The property is a rental, a flip, or another investment held for business. The loan is private money for that business purpose.

The client will…	Paid loan referral?
Live in the house	No. Commission only.
Flip a non-owner-occupied house	Ask your broker. Business-purpose private money can qualify.
Hold a rental in an LLC	Ask your broker. Same rule: investment use, not a home to live in.
Buy a second home for personal use	No. That is still consumer occupancy, not an investment loan.

If you are unsure which side a file is on, ask one question: “Will anyone in the buying group live here?” A yes means you stop. A no means you can ask the lender and your broker about a referral.

Rules still vary by state, and your brokerage can be stricter than the law. Clear any fee with your managing broker before you accept it. Put the answer in writing. One conversation covers every future investor file.

Which investor files are private-money files

You do not need to underwrite. You need to recognize the deals your investors already bring you.

• Fix and flip. The buyer is purchasing a house to renovate and sell. Banks often will not lend on the condition or the timeline. That file is a fix-and-flip loan. Fix-and-flip rates at Jaken Finance Group run 8.99%–13.5% interest-only for qualified borrowers.
• Fast, as-is purchase. The seller wants certainty and the property will not pass a conventional appraisal. That is hard money.
• Rental the bank declined on income. The property cash-flows, but the buyer’s debt-to-income ratio failed. That is a DSCR loan. DSCR rates run 5.75%–10.5% for qualified borrowers. The rent covers the payment. The buyer’s W-2 is not the test.
• Buy before the current property sells. Equity is real, but it is stuck until a later closing. That is a bridge loan.

The wider map is the agent financing guide. A listing that will not sell is a different pitch: cash-out while it stays on the market, covered in stale listing cash-out for realtor referral income. Qualified luxury and jumbo new-construction files can go up to 100% of cost on 100% financing, still capped by after-repair value. Send the scenario before you promise that leverage.

What you actually do on Monday

“No extra work” does not mean zero effort. It means you are not generating new clients. The steps fit inside work you already do.

1. Look at this month’s investor pipeline. Flag every purchase or refinance where the buyer will not live in the property.
2. Ask who is lending. If the answer is “my hard-money guy” or “I do not have a lender yet,” you have a referral conversation.
3. Send the basics. Address, purchase price, rehab budget if any, and whether the exit is a sale or a rental. Use what kind of loan do you need if you want a product read before a full application.
4. Submit the file at submit a flip once the client is ready. Include entity name if they are buying in an LLC.
5. Tell your broker you are referring business-purpose investment loans and ask whether a fee is allowed.

That is the loop. The showing, the offer, and the commission stay yours. The lender does the underwriting.

A conversation you can use with a client you already have

You do not need a script full of rates. You need a plain question.

“You are buying this as an investment, not to live in. Are you using private money, or are you still looking? I work with a lender who funds non-owner-occupied deals. If it fits, I can introduce you. I will also check with my broker on how any referral is handled.”

Then stop talking. Investors who already use private money usually know they need a lender who will not ask for tax returns as the main test. Investors who were just turned down by a bank are relieved someone named the problem.

Do not tell the client the fee comes out of their proceeds unless the lender’s term sheet says that. On many private-money files the referral is a lender-paid arrangement. Let the term sheet say so. Your job is the introduction and a clean file, not a quote you invented in the car.

A file you can picture

Say you represent the buyer on a non-owner-occupied duplex at $420,000. The buyer is taking title in an LLC. A bank declined the file because the buyer’s personal debt is high, even though both units are rented. You are already earning a buyer commission if the purchase closes.

That loan is a business-purpose DSCR or private-money file, not a consumer mortgage. You send the address, the rents, and the purchase contract. The lender sizes the loan on the property. If your brokerage allows it, the referral fee is a second payment on a client you did not have to find.

The same buyer on a vacant house with a $70,000 rehab is a fix-and-flip file, not a rental file. You still did not need a new lead. If the first lender backs out mid-escrow, use Second Look for realtors before the contract dies.

What to send so the fee is not a vague promise

A referral that closes has a short package. Gather this before you call:

• Occupancy. One line: non-owner-occupied, no one in the buying group will live there.
• Use. Flip, rental hold, or bridge until a sale or refinance.
• Numbers. Price, rehab budget, current loan payoff if this is a refinance, and expected rent or sale price.
• Entity. Personal name or LLC, and who signs.
• Timeline. Contract date and the day the seller expects to close.
• Your role. Buyer agent, listing agent, or both. Say whether you want to refer only, or whether you are licensed to originate and want to place the loan.

Missing occupancy is the mistake that stalls these files. If we cannot tell that the property is an investment, we cannot treat it as business-purpose private money.

Call (833) 264-7776, email info@jakenfinancegroup.com, or text the same number the video mentions. A same-day read on fit is faster than a week of the buyer shopping lenders alone.

In this video

• 0:00 — Realtors who work with investors can add revenue without new leads
• 0:08 — A referral fee on private money can sit on top of the commission
• 0:18 — This does not work on consumer loans for homes people will live in
• 0:28 — Business-purpose, non-owner-occupied investment loans only
• 0:32 — Ask your lender about a referral, or originate and send the file to a private lender
• 0:38 — Call, email, or text if you want help setting it up

Full transcript

If you’re a realtor and you work with investors, here’s a way to add a little bit more revenue to your business without doing any extra work. Your investors may be using private money. And if you originate or refer private money loans, you can make an extra referral fee on top of your realtor commission.

Now, this does not work for consumer loans, meaning loans for properties people are going to live in. This only works for business-purpose, non-owner-occupied investment property loans.

Just talk to whoever your lender is and see what you can do about getting a referral fee. Or originate the loan yourself and then send it to a private money lender like us. If you want help navigating this, go ahead and give us a call, shoot us an email, or shoot us a text.

Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. Closing times are in business days and commence upon receipt of appraisal payment and satisfaction of borrower conditions. Closing times may be delayed due to appraiser property access. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.