Specialist · Miami, FL · Member since 2017 · 151 posts · 20 votes
Hey!
I would love some tips on how could I network with private investors or people that have the money to fund 100% of the deals for 50%-50% JV with our company.
@Arturo Borges Create a lot of value for the BP community. Participate regularly in the conversation, help new investors and share your expertise. I don't think there is a silver bullet to find 100% of the money for a 50/50 split. Each investor and deal is unique.
@Arturo Borges Create a lot of value for the BP community. Participate regularly in the conversation, help new investors and share your expertise. I don't think there is a silver bullet to find 100% of the money for a 50/50 split. Each investor and deal is unique.
I used to work for a Turnkey provider and we often did JV's with the 50/50 split, but on occasion did a 33/67 split (to make sure the Private Lender would make 14-18%) The owner/operator of the business had 100+ deals under his belt.
As for networking to get private investors to fund your deals, you will seldom find someone willing to invest in you without any track record. Yes, investors invest in YOU and the deal you happen to have, but if they don't trust the deal-maker (you) then they will never invest. Ever.
Consider asking friends/family to invest in your first few deals, and be open to Hard Money to get things moving.
@Nathan Platter Thanks for the suggestion Nathan, I truly appreciate that. The same as I told Ryan, if I can be of any help, you can always get in touch with me.
I would love some tips on how could I network with private investors or people that have the money to fund 100% of the deals for 50%-50% JV with our company.
Thanks in advance!
Advertising. You need to develop a marketing plan the highlights what skills you have to bring to the table. Then you need to advertise the heck out of it.
@Arturo Borges Hey Arturo, I like your thinking of leveraging your time and capital to bring in other partners. That's exactly how I got started investing.
My biggest piece of advice is get your process/presentation dialed in to private partners.
Hard Money is easy to find, private lenders are a bit tougher.
The biggest thing to discuss with lenders is profitability of the deal and safety of their funds. These are 4 items to address with a private lender (hard money lenders already know this or will ask this before issuing funds).
1) Financial Security Through Lien/Deed of Trust - 1st position if lending all the funds for the project, 2nd position if you'll be gap funding (providing the difference from what a hard money lender will provide).
2) Named Loss Payee on Insurance Policy - this insures your money in the case of a filed claim (i.e. fire, storm, vandalism, etc)
4) Financials on Deal – The deal needs to make financial sense to the lender. How much will it sell for? Prove it with comparable sales in the past 3-6 months. How much renovation is needed? Prove it with a scope of work from your general contractor doing the job. At what price are you securing the deal? After net profit, what are you expecting to make? This “cushion” provides security for your investors return as you will take the financial hit should a deal go over budget or take longer to sell.
This should get your wheels turning when it comes to securing a partner for your next deal.
@James Wise That's a different suggestion I've had from other people James, it is very appreciated man, thanks and don't hesitate to shoot me an email at any time, maybe I can be of help!
@Brian Garrett You are 100% correct Brian, thanks for the input, we sometimes get caught up in asking for information and valuable tips and forget to provide value and give first. Thank you very much man
@Eric Loya Incredibly useful information Eric, thank you very much for the suggestions, I already got in touch with my attorney to draft things up and talk over some of these things. I am sure I can somehow be of some help in your REI career, so don't hesitate to add me up to your contacts.