The Private Loan Source Perfect for Growing Your Real Estate Portfolio

The Private Loan Source Perfect for Growing Your Real Estate Portfolio

1 min read
Matt Faircloth

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, N.J., is a developer and owner of commercial and residential property with a mission to “transform lives through real estate.” DeRosa creates partnerships to finance select real estate investments and has a proven track record of providing safe, profitable investment opportunities to their clients.

Experience
Matt, along with his wife Liz, started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia with a $30,000 private loan. They founded DeRosa Group in 2005 and have since grown the company to hundreds of units in residential and commercial assets throughout the East Coast. Under Matt’s leadership, DeRosa has completed tens of millions in real estate transactions involving private capital, including fix and flips, single family home rentals, mixed-use buildings, apartment buildings, and office buildings.

Matt is an active contributor to the BiggerPockets Blog and has been featured on the BiggerPockets Podcast three times (show #88, #203, and #289). He also regularly contributes to BiggerPockets’ Facebook Live sessions and teaches free educational webinars for the BiggerPockets Community.

Matt authored the Amazon Best Seller Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money. The book is a comprehensive roadmap for investors looking to inject more private capital into their real estate investing business and is a must-read for anyone looking to grow their business by using private lenders and equity investors. Kirkus, the No. 1 trade review publication for books, had this to say about Raising Private Capital: “In this impressively accessible introduction to a complex subject, Faircloth covers every aspect of private funding, presuming little knowledge on the part of the reader.”

Matt and his wife Liz live in New Hope, Penn., with their two children.

Education
Matt earned a B.S. in Industrial and Systems Engineering with a minor in Business from Virginia Tech. (Go, Hokies!)

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Most investors I know are perpetually on the lookout for more capital. Whether they are seeking lenders or partners, real estate investors always need more capital to build their businesses. So, where should you look? Once you get comfortable presenting your business to a potential lender or partner, you will find that some sources of capital work better than others for your deals.

In my years of investing, I have found one particular source of capital to be the ultimate for both you and your money partner when doing a private loan. While this vehicle works best as a loan source, when it’s used properly, the investor can double their money quickly through real estate loans. The investor has tax advantages not available if their loan came from other sources, and they will most likely be OK with you paying interest when the loan is repaid, not during the loan term. Investors tend to invest over and over with you through this vehicle because it’s very hard for them to put the money in their own pocket or use it for something else. This investment even comes with a built-in third-party custodian who makes sure that your loan is compliant with regulations—and this custodian is paid by your lender, not you!

Related: How to Improve Your Odds of Scoring a Loan With a Private or Hard Money Lender

The Private Loan Source Perfect for Growing Your Real Estate Portfolio

In today’s video, I go into detail on the subject and tell you not only why this loan source is great but also how to find lenders with them. They are probably all around; you just don’t know it. Watch the video to learn more!

[Editor’s Note: We are republishing this article to help out our newer readers.]

If you enjoyed today’s video, be sure to leave a comment here so we can get a good convo going.

Thanks for watching and have a great and profitable week!