BiggerPockets

This thread was started to have a place to brainstorm ideas that aim to raise private money. The goal is to think outside the box and realize prospects and locations to meet prospects that aren't readily apparent.

On another forum on BP we were talking about how we can use HML to rehab and hold for cash flow by refinancing out. The idea brought up by Bill (Financeexaminer) who if you're not following, you should!

The first idea was to target an obvious market such as those with CD's @ 2.5 where even 6-7% may seem utterly outstanding. Profile little old ladies, my thought was to take up volunteering at a local retirement home and just being social.

Personally I'm loving the idea because I'm a huge fan of the 50's, need to work on my cribbage skills, and just love talking to retirees in general.

Had it not been for Bill's suggestion I don't think I would have entertained the idea anytime soon. This topic is all about throwing ideas against the wall and, to each their own, run with some ideas and share experience!

Martin, is that what you are doing with rescapfunds.com? It sounds interesting - can you give us some information about it and how it operates?

Buddy up with a local SDIRA or custodian company and co-sponsor luncheons. That will get you in front of money with some decent inbound marketing techniques. Webinars give you larger scope too.

From there you will have to put the financiers into buckets based on what your capital needs are. We have people doing 2nds with higher rates, 1sts, and others that are comfortable putting money into funds. You have to document and establish a relationship for selling people securities so it is best to lead with them lending on projects if possible.

For advertising you can sell property instead of securities. This will attract folks that you can transform into equity investors once you establish a relationship with them.

That is our approach...is working fairly well so far. I would love to learn more from folks more successful than I about how they are raising funds with the lunatic banks not loaning money right now.

Entrust calls me every month, leaves a message, I call them back...and get no response. It is almost like they have it on their "to do" list to call and don't care about forming a relationship.

One of our local SDIRA shops is smaller and is co-sponsoring events with us...webinars and in-person meetings at the title company. They also do entity setup for SDIRA entities in addition to custodial services so you have everything in one place.

Forging the relationship is one thing. Developing the process to use the money correctly when you find it and stay compliant with the securities laws is the harder part. There is some information on using the web to raise money in the syndication group I formed on BP. You may want to check that out and work to develop a site and processes to find money.

The real trick is having inventory or projects to sell standalone to attract investors found via the inbound marketing efforts. This allows you to find investors without marketing securities. These people can be converted to security investors over time as a relationship is forged and the documentation process is finished. We have a Microsoft software engineer building this machinery for us right now since capital is the main constraint to our growth in this capital-starved environment.

Companies that set up SDIRAs or SDIRA entities are looking for the same thing that you are. You are both competing against financial advisor networks that want people to put money on Wall Street or in some crapola product to optimize their commission.

I like stocks and bonds too, but "advisors" are greedy and don't understand "alternative investments." Your pitch should be that they should diversify and invest some in Main Street and some in Wall Street. This is sexy right now with what is going on with the market and I honestly think we are in a secular bear market where traditional products will return zero or less in real terms for the foreseeable future.

People WANT to invest in real estate right now. They have to trust that you know what you are doing and you have to have things set up the right way. You will also have to convince the SDIRA folks to work with you instead of the next guy because they have limited resources too.

Be persistent....the number one trait of an entrepreneur. If you keep at it, learn the laws, and forge relationships the money will eventually find you instead of the other way around. Once you start to make private investors money they will brag to your friends and you will be oversubscribed.