What info for private investors?

What info for private investors?

Investor · Seattle, WA · Member since 2015 · 25 posts · 3 votes

In addition to using bank loans and hard money, we've also approached people for private investments.  So for example offered 10% after 12 months if someone puts in $5,000.  This has been pretty straight forward so far.  We have a standard contract, utilize the money for a project and then pay it back in 12 months or sooner (like if a flip sells sooner than 12 months).  However, a recent investor demanded to know all kinds of information about the project such as: where all of our other financing was coming from, wanted a copy of the title, a copy of the rehab estimate, appraisal, and wanted collateral.  Now keep in mind this is in addition to an information packet about the property (history, location etc) and the Bigger Pockets flip analysis.  My business partner was flabbergasted.  He didn't feel that we should have to provide all of that information to an investor.  I understood that it's more than anyone's asked for but also understand $5k is a lot of money to some people.   What kinds of info do others on the site/in the biz typically provide to investors?  Thanks!

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  • Investor · Canton-Akron, OH · Member since 2012 · 917 posts · 477 votes
    10y

    Sounds like you have someone who understands business and real estate. I suspect they could invest more than 5,000. How about providing them the information they are asking for, and in return asking them to fund most or all of a project.

    We have used a lot of private money and i would always have one private lender per project. If individuals want to lend less it would be an un secured note.

    We provide our lenders....

    Purchase Price Info, Property Address, Projected Rehab Costs, (typically just total amount) ARV.

    For security......

    Promissory note

    Mortgage

    Added as an additionial insured to insurance policy.

    For a 5,000 note I dont provide any additional security, as it would not e tied to a specific property. 

  • Investor · Seattle, WA · Member since 2015 · 25 posts · 3 votes
    10y

    Thanks for the feedback Dell!

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