How to raise private funds?

Question

I love the LAPS strategy. It's easy, practical, and a great concept for finding your next deal. The only trouble is, I've found several deals but am not currently in a position to pull the trigger. Any suggestions on how to find individuals who are willing to invest in your property? I've put the numbers together in preparation of sharing the deal with those individuals but again, just haven't been able to find them. Any input would be helpful and appreciated. Thanks

Caleb Dryden · Answer

Makes sense @Neal Collins. I've reached out to a few different people but having trouble gaining traction with people who are committed to jumping into this process with me. Most of them are fairly conservative and don't want to put their money at risk. Oh well, keep on searching.

LAPS is the acronym for Leads, Analyze, Pursue, Success. Simple for sure but a good reminder of where you need to be in the process of finding deals and making them happen.

Neal Collins · Answer

@Caleb Dryden What is the LAPS strategy?

It helps to think about raising money from a theoretical lens first in my opinion. People are looking for secure returns on their money. They have a variety of investment vehicles to achieve this, and your job is to attract them to your vehicle. You can do this by showing stability (less risk) from experience, security (priority lien position), and reward (financial incentive). To stand out your investment vehicle should offer security, reward, and a high degree of customer service.

You can attract lenders in various ways and here are things that have helped us: Tell people what you do or how you plan to do it. Partner with people and give up equity to gain tract record of borrowing from people. Network with other investors in your area, tour people through your projects, and go tour other people's projects. Talk with friends and family. Learn creative financing strategies. Meet other professionals that are not in real estate and tell them what you do.

Good luck.