Mortgages & Creative Financing

How to Build a Million-Dollar Network of Private Money Investors

Expertise: Real Estate Investing Basics, Real Estate Deal Analysis & Advice, Mortgages & Creative Financing, Landlording & Rental Properties, Business Management, Personal Development, Flipping Houses, Commercial Real Estate
161 Articles Written
creating-LLC

"Your network is your net worth." —Tim Sanders

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

As real estate investors, we all know the importance of building our networks. But is our network really connected to our net worth?! From my experience, the answer to this question is yes! When building a million-dollar network of private money investors, there are three levels that you want to reach.

In the video below, I go over each step showing you the way to build an enormous private money network. We’ll cover the basic to advanced stages of this process. It all begins with people who trust, like, and respect you. Then you expand beyond this group. But a strong private money network always begins with people who already trust and like you.

Related: 4 Essential Steps to Take BEFORE Seeking Private Money

How to Build a Million-Dollar Network of Private Money Investors

Rome was not built in a day. Strengthening your network of private money investors takes time, energy, commitment, and focus. Remember, private money is a marathon, not a sprint.

What has worked for you when building your network of private money investors?

Please leave comments below. 

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, New Jersey, i...
Read more
    Kevin Sapp Lender from Cary, North Carolina
    Replied about 2 years ago
    Matt, Thanks for the video. I’m not the target but the targets target 😉 that is a lender. Use your local REIA. There is money there, lot’s of money. Personally as a lender, I like to see the people that are concentrating on their business growing their core skills, building their network of rehabbers, contractors, lenders, agents, legal, accountants, etc. When I see folks starting down the 10x it path, pushing their name out more than their product. Selling talk and not product, I find other places to put my cash. It’s a fine line growing, marketing and advertising for the business but not self promotion. Try not to cross it. If you start making videos while driving in your car, or facebook live and “waiting for a few more people to join” and giving them a shout out, you crossed the line. Just my .02 as one of the people being targeted by this video. Kevin
    Matt Faircloth Rental Property Investor from Trenton, NJ
    Replied about 2 years ago
    Hey Kevin, Thanks for the comment. I agree, it’s important to be able to walk the walk. I do think that using social media channels to keep people up to date on what you are up to is fine (but hey I am biased because I have a YouTube channel LOL). As long as the content you shoot is authentic. When someone produces content for the purpose of education (that’s all this video was, just an education video, not targeting anyone), that’s authentic. Shooting videos from real projects that are underway and avoiding “flash in the pan” videos driving around with checks in Lambroghini’s is another example. Thanks again! Matt
    Jonathan Jones
    Replied about 2 years ago
    I am a new investor in Washington, are you able to do nationwide funding or are you restricted to a certain area? would like more information including contact information if available.
    Eric Radecki New to Real Estate from Norwalk, CT
    Replied about 2 years ago
    Get immediate access to funding! We work with a national network of private money lenders that can fund your deal – credit or no credit, all types of investment properties, $50,000 up to $10 million, up to 100% LTV for lien free and property with equity. Non owner occupied only. Contact [email protected] or lvm 203-674-9201 to discuss.
    Pat McGeehan
    Replied 9 days ago
    Eric, What are your current rates on money these says ? With 75% LTV
    Joseph OBrien Contractor from Milwaukee, WI
    Replied almost 2 years ago
    Let’s talk
    Alfredo Elias Rental Property Investor from Colorado Springs, CO
    Replied about 2 years ago
    Matt, This video came at the perfect time! After finally finding the perfect out of state market for me, I started drawing up a plan to find private lenders, which currently consists of only Levels 1 and 3. However, I definitely see the value of incorporating Level 2 in there. This makes so much sense! Thank you… I always find your videos and posts very helpful. Alfredo
    Matt Faircloth Rental Property Investor from Trenton, NJ
    Replied about 2 years ago
    You are welcome Alfredo!
    Glenn Miller from Chesterfield, Virginia
    Replied about 2 years ago
    Hi Matt– Thanks for sharing your wisdom re private money investors. My wife and I have a couple vacation rentals that are producing some positive cash flow, however, we financed these properties using our own cash. We are looking to add to our portfolio with additional strategies, specifically, fix and flips, and lease options. Your explanation of the various levels of private money was very helpful. I’ll be sure to check out your other videos as well. Thanks again, Glenn
    Matt Faircloth Rental Property Investor from Trenton, NJ
    Replied about 2 years ago
    Hey Glenn, First, congrats on the vacation rentals. That’s an asset class I never got into but would like to expand there in the future. Glad you liked the article and the video! Matt
    Eddy Ogbekhilu
    Replied about 2 years ago
    Looking to raise capital for buy and hold properties in Lutz area of Florida.I have an assisted living facility that,s licensed for 6 beds and am looking to sell the business and lease out the property to facilitate this journey.Need some advice or rather input from the BP community.Potential gross income of about 29k monthly.Just a day old to BP,suggestions welcome.
    Matt Faircloth Rental Property Investor from Trenton, NJ
    Replied about 2 years ago
    Hey Eddy, This sounds really exciting! I am not an assisted living owner so I wouldn’t be the best support, sorry! If you don’t get good feedback here consider doing a post on the forums! Matt
    Alex Ramirez
    Replied about 2 years ago
    Matt, I appreciate the way you laid out the three levels of private money lending. As an up-and-coming investor, private money is a big part of my strategy and this video helped highlight the problems of not starting at level 1 and moving step by step to level 3. I know I’m guilty of trying to broadcast my RE pursuits prematurely! I’ll double down on level 1 activities. Thanks again!
    Matt Faircloth Rental Property Investor from Trenton, NJ
    Replied about 2 years ago
    Thansk Alex, glad you liked it. Remember, one foot infront of another!
    Michael W. Tripp
    Replied about 2 years ago
    Very helpful, and practical steps for a newbie like me. Thanks.
    Matt Faircloth Rental Property Investor from Trenton, NJ
    Replied about 2 years ago
    You are welcome, Michael!
    Roger Johnson from Maplewood, NJ
    Replied about 2 years ago
    Great video! I have a question though on receiving money from the private investor. Exactly how do you determine what their payout or percentage back will be? If I purchase a house for $100k with $50k reno budget and they invest $10k, do you factor the percentage from the purchase price, the reno budget or both? Meaning would it be 10% return (from the 100k); 20% return (from the $50k) or 6.7% return (from the $150k)? Or is there another way this is determined? Thanks!
    Matt Faircloth Rental Property Investor from Trenton, NJ
    Replied about 2 years ago
    Hey Roger, There are so many different ways you can structure it so it’s hard to say. If all they are putting in is 10K and it’s that large of a deal I wouldn’t give away too much equity. If you haven’t already, check out my book, https://www.biggerpockets.com/privatemoneybook I go into a bunch of scenarios there that may help you with your deal. Best of luck! Matt
    Joseph OBrien Contractor from Milwaukee, WI
    Replied almost 2 years ago
    I’d love to chat with you. Joe
    Anita Fulton
    Replied almost 2 years ago
    I am interested in building a portfolio of multi-family units. I am interested in private lending options to achieve this goal.
    Account Closed
    Replied 10 months ago
    Hi Matt, I just came across the very useful video. Nonetheless I am new to investing in RE. I identified a wonderful commercial opportunity with 95% occupancy including top national retailers, i dont know how to fund the deal, as the owner wants 7mil. It's based in Washington dc
    Bill Iannelli from Phoenix, Arizona
    Replied 9 days ago
    Good stuff Matt. Might want to check the spelling of Enormous on the white board.
    Harry Arnold Flipper/Rehabber from Hazlet, New Jersey
    Replied 9 days ago
    Hi Matt. Great video. You have lit a spark under my butt! I just got off the phone with my hard money lender, regarding some adjustment to loan amount or something. Your video made me think. I’ve done 6 deals in the past 2 years. All were great successes. I’ve earned the right to start seeking private investors. Plus, the return I would give is better than any stock. Thanks Harry
    Jerry Minney from Castle Rock, Colorado
    Replied 9 days ago
    Hi Matt, thanks for video. I've been investing for many years using levels 1 and 2. I've attempted funding a Reg D offering for a blind pool which I consider level 3. How do you do project blasts without violating SEC rules?
    Pathik P. Investor from New Jersey
    Replied 8 days ago
    Hi Matt, great video. I'm just getting started on my REI journey with 2 others in an LLC. We're set on going down the BRRRR strategy path, and of course this requires short term loans if we're not buying with cash. My question to you and the BP network here is: How would you compare private money to getting a HML that will be paid bad regardless when you cash out refi your rehabbed property? I'm sure there are specifics that differentiate the two, but I'm also aware that everyone's situation is different based on their goal/plan.
    Mary D. Rental Property Investor from Salem, NH
    Replied 7 days ago
    Great info! Made it simple & clear. Of course you always hear this method or something like it but, you put it in a down to earth application! Thanks!!!
    Brandon Peterson from Spokane Wa
    Replied 6 days ago
    Hi Matt. Great video. I’ve been investing since 2003 when I bought my forst home then turned into a rental. Had some time away due to recession and cash position and careers. I was. RE agent for 10 years then commercial Banker for 10. Now full time investor and loving it. Your video summed up what I needed. The levels of private financing. Thank you for that! I’ve done around 12 deals utilizing seller or private financing and wow what a better experience than using convention financing means. Would love to connect and learn more as I continue to scale my business. I relate 100% with the utilization of RE in order to assist others in building wealth and financial independence!!