Building PARTNERSHIPS with TRUE Private Money Lenders

I've been a full time real estate investor for 4 years now....prior to that I was a "successful" outside sales rep working a 9-5 for a large corporation, making a pretty good living.  The only problem with that was I hated my job, had no interest in what I was selling, and never felt comfortable in the corporate world.  One day, I woke up and decided I was going to quit my job, be an entrepreneur, and jump into real estate full time (not quite that abrupt, but very close!)   Little did I know, I would develop a whole new set of skills and be able to raise millions of dollars from people I barely knew, and turn that into a "successful" real estate business.  

Since I quit my J.O.B. and jumped into real estate, my company has flipped over 60 homes in Columbus, Ohio since 2013. Honestly, I never even knew private money lending existed until I got into real estate. I read a lot of books, listened to a lot of podcasts and gurus, bought my fair share of real estate dvd's and programs, went to all the local RE networking groups, etc....that being said, I've learned a lot about real estate and raising private money over the past 4 years. Through all that learning, I'm grateful to say I have been fortunate enough to fund all but 2 of my deals with private money during my real estate career (had to use hard money on those other 2 deals), and private money has allowed me to grow my business in ways I never imagined.

Needless to say, private lenders are really the core of my business and allow me to do what I do. Let's face it, I could still send out marketing, find deals on the MLS, manage contractors on a job site, and still complete a successful rehab project, but without private lenders I wouldn't be able to rehab the quality and quantity of homes I do today. To me, private lenders have never been just a person loaning me money to fuel my business - I've built long term PARTNERSHIPS (and even friendships in some cases) with all the private lenders I've done business with, and I still have private lenders who have been working with me since DAY 1 of my real estate career.  It takes a lot of trust for someone to take a chance and loan $100k of their hard earned money to a young man just starting a real estate business so he can rehab and flip a home, knowing there's some risk involved and they could lose some or all of their money, so I really cherish those lenders that were there right from the beginning and believed in me.

Raising private money was very challenging in the beginning, especially with no track record in real estate, but it has gotten a little easier to "sell" a private lender on investing in one of my deals now that I have a nice portfolio and website of completed projects I can show them.  Even so, there is still a GREAT level of trust that must be built between you and the private lender, so it's very important to keep lines of communication open, give regular updates and progress photos of the project, and make sure you always under-promise and over-deliver.   

Today I continue to rehab and flip homes in Columbus, Ohio, and still use private money to fund those projects.  However, in recent months my business has gradually (and I'd say naturally also) trended toward bigger opportunities, and right now I'min the midst of breaking ground on several new development/new constructions projects. I'm very excited about this next phase I'm getting into with my business and I've already learned a lot about zoning, planning, local historic commissions, construction drawings, etc. I look forward to continuing on this journey and learning as much as I can about new construction so I can develop the team and resources around me needed to be successful, just as I did on the rehabbing side of my business.

Now, with these larger projects comes the need for more funding from private lenders, and possibly a different type of private lender wanting different terms and having an appetite for a larger more exciting project than just flipping a house.  So that's where I find myself now, looking for bigger fish in this new pond, but always keeping in mind the core strengths of private lending which to me is BUILDING TRUST, COMMUNICATION, AND ALWAYS UNDER-PROMISE AND OVER-DELIVER....