Investor advice

5 Replies

Hi there,

I've been trying to raise $45k for a couple of months to finalize a deal, but haven't been able to find the right partner.

I came across a company, The Funding Group (TFG) which goes to all their lenders and raises money on your behalf.  In exchange for that they charge a 12% fee.  Also, each lender they go to needs to run a credit report.  As a result you can have multiple hits on your credit with no guarantee of getting the funding.

I'm looking for some advice here.  How should I approach this?  I'd very much prefer to find my own lending source, but it hasn't worked out (mostly because the loan would be a second lien position due to the seller financing).  Is something like this a terrible idea?

Thanks for your help!
Robert.

@Robert Lindsley

wow. A 12% fee just to find a lender. Not including the lender's charges and the interest. 

There's got to be a better way for you to raise that money? Have you network in your local REI looking for lenders or HML ?

@Robert Lindsley I second @Chris T. 's sentiment that 12% just to find a lender seems like a very high fee!  If the deal you are trying to fund is a great deal, you should be able to find a partner willing to take the second lien position in return for some kind of payment (which could be structured numerous different ways).

Thanks @Chris T. and @Anthony Susco .  I agree.  I need to get funding lined up asap but I'm going to continue looking.  Hopefully I won't need to go down this route at 12% - I certainly don't feel like with those terms there's any interest in them becoming a long-term financial partner.

FWIW The deal is terrific. Cap Rate of 11.18% with a cash on cash ROI of 22.06%!

Thanks for your thoughts on this!  I definitely need to keep looking.

Robert.

Hi @Stephanie Potter

I haven't yet -- I was traveling last week so wasn't able to make much progress on it.

Hopefully the PA for the property will be signed next week.  From there I have 15 days to finalize the funds.

I'll give you a call next week.  Hopefully there's a way we can work together!

Thanks,

Robert.

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