Where do you find these people?

Question

I'm familiar with the site and i'm a broker myself, but how do you go about finding investors to put up for the downpayment? Is there a number to call of a club filled with people waiting to spend money?

Let's say I found a good deal. I'm not going to offer unless I have investors to back that up. Where do you find investors? My friends and family are poor white trash, who would i pitch the property to?

I come across good deal frequently, which I want to invest in (but have no money), so where are all these backers I hear about?

Jeff Kehl · Answer

I've had luck recently having the sellers be the private lender on the downpayment. They carry a 2nd note for 10-25% of purchase price. Works particularly well for older sellers who own free and clear or have a large equity position. They're generally just wanting to sell and be done with the property and they like the extra income check each month. I've been paying about the same I pay to banks 5-6% interest but use a shorter amortization generally 5 years.

Bill Jacobsen · Answer

On a flip the money person makes money, the person coordinating or doing the rehab makes money and the person finding the deal can make money.  As a contractor and a broker it sounds like you can do everything but be the money person.

As  broker you can make 3 to 6% on each deal.    If you work at it you can do 30 to 60 deals.  In our area new houses are $250,000 or more.  Even 30 sells X 3% X $175,000 is over $150,000.

I have also funded contractors.  I usually charge 12% +2 points but have charged as much as 10% on money loaned +  50% of remaining profits.  Obviously, the contractor makes money or wouldn't be willing to use my money.

You need to make money as a contractor and broker.  Spend less than you make and build and investment fund.  Then you can make money all 3 ways.

Good Luck.

Bill

Lisa Kohl · Answer

I agree with Michael Noto- Start attending your local REI Clubs and meetups right away. Become consistent and continue to network. There are plenty of REI lenders out there. If you land a great deal, you shouldn't have a problem finding the cash for projects.

Michael Noto · Answer

@Daniel Morey The best place to start looking for backers would probably be a local real estate investment group.  I am sure there are other active members here on BP from the Charlotte area that will probably chime in with specifics.