BiggerPockets

When Seeking to Raise Private Capital for Reo/short sale Flips where does one go. There are few really active investors in this area who are not already working with someone. What is the best way to attract new investors? Novice investor seeking advice from peers.

Check out Adam's blogs on raising private capital - it's chaulked with a lot of great useful nuggets!

http://www.biggerpockets.com/blogs/862/category?category=1606

Not only that, aks them to tell their firneds and family about it and offer something in return.

If anybody brings me a private investor, I offer to pay them a point for the money loaned. Almost in every case, I borrow a $100k minimum amount so that is $1000 of cold hard cash just for telling somebody about me!

Once you find private investors...how do you structure and document the partnership? Or do you just offer a percentage return ?

I, like Will, also will offer to compensate someone for bringing me a private investor. I'll give him/her a choice between a one-time fee, silent co-sponsor (only on syndicate deals), or equity. Jon's right about getting the right documentation when setting up securities; the cost (several thousands or tens of thousands of dollars and/or jail time) for getting caught without the proper docs aren't worth it IMHO.

Thanks everyone for the great information.

Ana- It really depends on the comfort level of the investor. We usually offer a good rate of return or some more agressive investors would rather have a % of profits. Either way, everyone wins 99.9% of the time.

Brian, I have considered TA funding but here is my issue. Most properties are channeled via listed reo's, and sheriff sales where ta funding will not help. Ta funding unfortunatly will not grant me the time I need to clean up and paint/prep for resale. I understand where it comes into play on the short term flip but na for the cheap rehab ect. Thanks for the input Brian.

Sometimes they are recorded as the trustee of the self-directed IRA in trust for the individual. So search for the names of those SDIRA companies.

Some great stuff here...

I will also add that you should get familiar with real estate cycles and how it applies to today's potential private lender. The number 1 concern they have, if he or she is a potential new private lender, is the current real estate market and how safe it is to invest in any facet of real estate to begin with. That's your job. Once you overcome that concern and build confidence of how its important to invest now, then you can go into your PL program. Once that concern is lifted they can now listen to you with an open mind. Until you do that then its just like trying to drive a car with a muddy windshield.