There are two main ways to become a private money lender in Kansas: lend your own money directly to real estate investors on specific deals, or invest in a private debt fund that makes and manages those loans for you. Lending directly gives you full control but takes capital, time and legal help. A fund spreads your money across many loans and lets an experienced team handle the work. This guide walks through both paths so you can decide which one fits.
Seek First Capital is a Wichita private lender, and we also manage Seek First Capital Fund 1, so we see both sides every day.
This article is for educational purposes only. It is not legal, tax or investment advice, and it is not an offer to sell or a solicitation of an offer to buy any security.
1. The Short Answer: Two Paths
Path 1: Lend directly. You find a borrower, review the deal, fund the loan, record a lien on the property and collect the payments. You choose every deal and carry all the risk of each one.
Path 2: Invest through a fund. You invest in a private debt fund that lends to many investors. The fund's team underwrites, services and, if needed, works out each loan. Your money is spread across many properties instead of one.
2. Path 1: Lending Directly
Here's what it takes to lend on your own:
Capital. Enough to fund a full loan in your market. With the typical Wichita home value around $204,800 as of September 30, 2026, according to Zillow, a single flip loan can easily tie up six figures.
Vetting borrowers. Review the purchase price, rehab budget, after repair value, the borrower's track record and the exit plan. This is the same process a lender uses on the borrowers we fund.
First lien position. Most private lenders lend only in first position, meaning they get paid first if the property is sold or foreclosed.
Loan documents. A promissory note and a mortgage, prepared by an attorney. Don't use a template you found online.
Title and insurance. A lender's title policy, and proof the borrower has insurance that names you as the mortgagee.
Servicing. Collecting payments, tracking taxes and insurance, releasing rehab draws and handling payoffs. You can do this yourself or pay a loan servicer.
3. Kansas Basics to Check With an Attorney
Before you lend a dollar, sit down with a Kansas real estate attorney and ask about:
Business purpose vs. consumer loans. Loans to investors for investment property are usually treated differently from loans to someone buying a home to live in. Know which kind you're making.
Licensing. Whether your lending activity requires a license, and whether that changes with how many loans you make.
Interest rate limits. Whether usury rules apply to the loans you plan to make.
Foreclosure. How the process works in Kansas and how long it can take.
4. The Risks
Default. A borrower can stop paying, run out of money mid rehab or walk away.
Foreclosure timelines. Getting the property back can take months, and you'll pay legal fees along the way.
Concentration. With one or two loans, one bad deal can wipe out years of interest.
Time. Vetting deals, inspecting draws and chasing late payments is real work. Private lending is only passive if someone else is doing that work.
Good underwriting is the best protection. See how a loan is reviewed on our fix and flip loans page: purchase price, rehab budget, ARV and exit all get checked before a dollar goes out.
5. Path 2: Investing Through a Private Debt Fund
A private debt fund pools money from investors and lends it to real estate investors. The fund's managers source and underwrite the loans, hold the liens, service the loans and handle any defaults.
Who qualifies. Most private debt funds, including Seek First Capital Fund 1, are open only to accredited investors.
What to ask for before you invest:
The Private Placement Memorandum (PPM) and subscription documents
Loan to value limits on every loan
Lien position (first lien or not)
The manager's track record, including defaults and how they were handled
Fees, distribution schedule and how and when you can get your money back
How concentrated the fund is in any one borrower or property
6. How Seek First Capital Fund 1 Is Structured
Seek First Capital Fund 1 is a private debt fund that pools capital from local investors to provide short term financing to real estate entrepreneurs in Wichita. Based on the fund's published summary:
Security: first lien position, secured by real estate
Loan to value: maximum 70% LTV
Minimum investment: $100,000
Who can invest: accredited investors only
Learn more about who's behind the fund, or visit Invest With Us to request the offering documents.
Frequently Asked Questions
How much money do I need to become a private lender?
To lend directly, you need enough to fund a full loan plus legal and title costs, which in Wichita often means six figures. Seek First Capital Fund 1 has a $100,000 minimum and is open to accredited investors only.
Is private lending passive?
Lending directly is not passive. You vet deals, inspect draws, collect payments and handle defaults. Investing through a fund is more passive because the fund's team does that work.
Do I need a license to lend money in Kansas?
It depends on the type and number of loans you make. Ask a Kansas attorney before you start.
The Bottom Line
You can become a private money lender by lending directly or by investing through a fund. Lending directly gives you control but takes capital, time, legal help and the stomach for a default. A fund trades some of that control for diversification and a team that handles the work.
Want to put your capital to work in Wichita real estate? Visit Invest With Us or call 316-330-3364. If you're an investor looking for funding instead, submit your deal.
Important disclosure: This article is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security. Any such offer will be made only through the confidential Private Placement Memorandum and related offering documents of Seek First Capital Fund 1, and only to persons who qualify as accredited investors.
