Raising Private Capital: How I Raised $50,000 Over Dinner

by | BiggerPockets.com

Several weeks ago at a family get-together, I ate the best homemade meal I’ve had in years (my mother-in-law cooks a mean lasagna).  As I gorged on a second serving, a relative at the table asked, “So… it looks like you guys just bought another rental, huh?”  Seeing as I was struggling with a mouthful of lasagna, my wife stepped in and answered for us.

She shared a few details on the ins-and-outs of our rental business and divulged how our most recent acquisition was going to need a major facelift.  After a few minutes of answering several questions on the topic, another relative steered the conversation away from real estate.  Dinner wrapped up uneventfully about an hour later and everyone departed for home.

Fast-forward two weeks…

My wife received a voicemail message saying something to the effect of:

“It was great talking to you and Arthur a few weeks ago.  Listen, I’d love to talk to you guys a bit more about your strategy.  Give me a call when you have a moment.”

We returned the phone call and discovered that her relative was interested in investing with us.  As it turns out, he’d been considering investing in real estate for some time, but was apprehensive about property management and the rehab process.  We agreed to set up a meeting to discuss our business model and how we might be able to help him with his investing goals.

The Meeting

Up until this point in our investing career, we had never used private money, or even hard money for that matter – so we educated ourselves.

My wife and I spent countless hours googling topics such as trust deed investing, creating notes and raising private capital.  We combed through nearly every forum thread here on BP (side note: thanks BP for all the solid FREE content).

I even went so far as to practice a mock interview with myself.  We tried to anticipate every possible question he would ask about our business, our exit strategy, the terms of the agreement, etc.

In the end, we over-prepared for the meeting.  I imagined we were going to be answering questions for at least thirty minutes before we’d be able to discuss our latest deal.  What happened instead was a brief Q & A session that lasted literally five minutes.

It was so brief that I had to re-direct the conversation back to the logistics of our prospective deal.  I wanted to make sure he understood the risks and terms of our agreement.  After we discussed this in more detail, he remained enthusiastic about the opportunity and had agreed to fund our next deal. Several weeks later, he wired the money to escrow without a hitch and we closed on our most recent property.

My wife and I are by no means gurus.  In fact, we are not even full-time real estate investors.  However, one thing we learned from this experience is: indirect marketing can be just as effective as direct marketing!

The Power of Indirect Marketing

It is no coincidence that my wife’s relative approached us about investing in real estate.  For the past several years, we’ve been vocal about our rental business.  Through a combination of blogging, speaking at local real estate clubs, posting rehab updates to my Facebook page and simply sharing the details of our business to anyone who asks, we’ve created credibility within our social sphere of influence.

While I would love to say this was all by design, it wasn’t.  What I can say is that all of these indirect marketing strategies have helped to brand us as the “real estate couple” in our various social circles – friends, relatives, co-workers, etc.  Often times at group settings, one of the first questions we receive is, “How are the rentals doing?” or “What’s going on with the real estate market?”

This has provided us a platform to share what we are doing – and it made us approachable to anyone interested in investing.  We’ve successfully done one deal with private money and are already in talks with our private investor about doing a second deal.  Now that we’ve learned the basics of trust deed investing and creating notes, we are going to pursue this strategy more aggressively over the next few years.

If you are looking for private capital, developing credibility is a MUST.  Whether it’s via blogging on BP, posting updates on Facebook or attending your local REIA, you need to be visible.  Take a look at your business and ask yourself if you are maximizing your visibility.  Are you creating opportunities to highlight your investing experience to others?  I’m not suggesting you go out of your way to brag about your success, but the next time someone asks what’s new in your life, why not share a few details of your real estate business?

Just think – next time you ask your aunt Cathy to pass the mashed potatoes, you might be talking to your next private investor.

Readers – what are a few of your indirect marketing strategies?

About Author

Arthur Garcia (Google+) Arthur is a buy and hold investor in Southern California who is buying up dozens of homes while working a full time job. Arthur acquires properties using a combination of hard money, HELOCs, partnerships and private investors.


  1. Arthur –
    Are the Quarters and Pennies your mother-in-law’s secret recipe?

    Great post, man. By making sure that your circles were aware of what you did in real estate, you created the opportunity for yourself to find this financing. In much the same way, I tell our users to make sure that they are not only on BiggerPockets, but active on our forums, blogs, and dashboard to ensure others know and want to do business with you.

    Welcome to the blog team!

    • Josh,

      Thanks again for the opportunity to post this article. It was a great experience and I look forward to posting many more articles!

      BTW – when I took that photo my wife thought I was crazy! She thought I was even crazier when I told her why I was doing it – loL!!

      Thanks again for letting be apart of the vision over the past year!


  2. I love this article…it is so true!

    Often people need to see your success and know that you are an expert in what it is that you do. Blogging, posting on facebook, and doing a lot of taking is so important.

    I am always so surprised how easy it is to talk about real estate with people. So use that to your advantage!

    • Thanks Ashlee!

      You are correct – taking time to post a note on Facebook or to “update your status on BP” only take a few minuets, but it does help associate you with your business. I think the trick is finding ways to add value or perk your “followers” interest while doing it – like posting an interesting article, an interesting photo, etc. without coming of like billboard!

      I read this quote by Earl Nightingale and I think it holds true in every aspect of life, including personal branding: “You are what you think about”.

      Thanks for posting a comment on the article!


  3. Brandon Turner

    This is seriously my favorite blog post I’ve read in weeks, and I read a lot of blogs! I think you pretty much summed up everything I’ve been trying to put into words lately. “Indirect Marketing” – I didn’t know it had a cool name like that, but it’s so important it deserves that cool name (so, I’ll totally be using that phrase now).

    I’ve always believed “real estate is cool” and most people would love to be “cool,” and make money – of course. As investors, we get to help people get there (we are like The Fonz, but without the leather jacket).

    My favorite quote in this post is when you said “developing credibility is a MUST.” This is so true! This definitely doesn’t happen overnight, but it isn’t difficult either. Just being involved can do wonders.

    Thanks for the encouragement Arthur! And welcome to the blog! I’m totally looking forward to more of your stuff!

    • Brandon,

      You are too kind sir, but Thank YOU!!

      I’m still learning what it means to “build credibility”, but what I can say is that it does take time. However, another idea could be to teach at a local REIA club while wearing a leather jacket. People would associate you with “the fonz” and immediately reach for their pockets to invest with you – lol!

      Thank you for the encouraging words and for all the education/blog posts you’ve been putting out there. You are definitely in a category of your own!

      Take care – see you in the blogsphere!!


  4. Al Williamson on

    Thanks for the reminder. Sometimes I shy away for talking about all the things I do because a lot of my friends have poorly performing real estate (underwater home, etc.). But your story illustrates that one never knows who their next business partner/investor will be.

    • Hey Al,

      I hear ya about being shy regarding RE investing. I think knowing the “right” times to talk about your success is more of Art than a Science. Many of my friends and relatives are also in a similar positions as your circle of friends – upside down, short-selling their house, renting, etc.

      However, I should also mention that I bought my first rental from a family member who was “letting his house go”. I guess that is all part of the process in building a brand.

      Thanks for the comment AL – I appreciate the feedback!


  5. Aaron J Kelley on

    This is a great article and thank you for sharing it with us. My wife and I are looking to purchase a rental property this summer using private money. Up until now, all of our real estate deals have been done from our own money resources. We now have some individuals interested in working with us, and we are very excited about the opportunity.

    If you have any additional advice, notes, or information regarding trust deed investing, creating notes, and raising priviate capital that you do not mind sharing, I would greatly appreciate it, as the internet is so dense with good and bad information, it can get difficult to sift through. Again thanks for this article.

    • Hello Aaron,

      I am glad you found the article both interesting and helpful. A few pieces of advice that would have helped me through this process would have been:

      1. BP – Do various searches in the forums and articles archives using the a few of these key words: Private money, first trust deeds, creating notes, etc.

      2. Escrow – Get a hold of an escrow officer (before you start the process) and ask all the “dumb” questions you can think of before hand. Then do more research on any additional areas you are still not clear on.

      3. RE Agent – Touch base with a Realtor (preferably on you’ve worked with before) and ask them to help “walk you through” the process.

      4. RE Lawyer – Talk to a RE lawyer about creating notes and get their advice.

      I hope that helps! Thanks again for taking the time to comment and reach out. Feel free to PM/email me if you need more help!


  6. Great post Arthur.

    The power of having a simple conversation. An investor friend told me when I was brand new never to “qualify people” or make assumptions. You won’t know the answer to any question until you step up and ask it. Surprisingly, you will get a lot of “yes’s even when you aren’t expecting them. And, you never know where networking is going to lead you; not even with your family.

    • Hello Sharon!

      The thing I learned is that you never know what opportunities might present themselves. All I can do is just be prepared so that when an opportunity does arrive, I’m ready for it. Thanks for the comment and feedback!



  7. Great debut Arthur!!

    It’s important that we not overlook the simple networking opportunities all around us.

    In regards to your question (good idea) my favorite place to pick up private money was a local cigar shop in Tampa. You can have a smoke and network with others in a personal and closed-off setting.

    Talk soon,

    • Hey John,

      Sorry for the delay – I never thought of the cigar shop, but that make a lot of sense. I know one investor who spends a considerable about of time working with non-profit charity organizations – rotary club, lyons club, etc. Overtime, she’s been able to raise MILLIONS (literally) just by staying active and visible in her community.

      Thank again for taking the time to respond.


  8. Frank Jutras on

    Great job! Sometimes you need to spend hours promoting, speaking to people about a subject and networking before you see results. We never know where money is going to come from. That is why we have to speak about what we do every chance we can and look for every opportunity to find an investor.

    • Frank,

      Great point. Networking is all about adding value and making connections. The more value you bring the better your connections and as a result, the better your opportunities.

      Sounds like you are on the right track. Keep it up!

      Thanks for the comment!


    • Ben,

      Thanks. I’m trying to keep all my post simple and action-oriented. I want people to see that there is NO MAGIC when it comes to investing – nothing ever is. However, with hard work and focus, things do seem to come together.



  9. Hi Arthur,
    Congrats on the secret recipe of dinner layered with private money sauce. We’ve yet to use family for deals, but if you can make it work and keep everyone protected, it’s a great idea. Do you have an “elevator speech” for people who ask you about investing so you can make them aware of the idea that they can put their money to work a bit harder?

    • Hello Tiffany,

      Thanks for the comment.

      I actually do have a “elevator pitch’. I use it quite a bit for my day job, it is called the 3rd party sell. The 3rd party sell is when you sell by telling your “target” a success story of someone who was in the same position as them. For example, if my “target” has money sitting in the bank. I’ll share a story of how one of our investors took money out of the bank and invested with me. During the story I’ll go over all the objectives and reservations my target might have. When I’m done sharing the story, I’ll ask if they’ve ever thought about investing, etc?

      I’m not sure if that helps, but I’ve found that the best way to “softly” share our business model. Raising capital is not the quickest way to access money, but overtime people should start to gravitate to you.



  10. Hi
    If i invested 50 000 usd in one of your projects. What returns could you offer, whats the risks and other, any guarantees?

    House flipping?

    Kindly regards

    • HI Hans!

      Thanks for reaching out. I’ll be happy to share more details regarding our business model. I’ll email you offline to discuss the questions above in more detail.

      In short, we typically offer both returns for long-term (rentals) and short-term (flips). You capital would be secured by a 1st trust deed and the property would be your collateral.



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