Seeking Advice on Finding a Private Investor for Cash Purchase

[Karinne Ovalles]

Hi BiggerPockets community,

I'm looking into a real estate deal that needs to be paid for with cash, and I could really use some help finding a private investor or lender who might be interested in funding this kind of purchase.

I'd appreciate any advice on:

- How to approach a private investor about financing a cash deal

- Ways to make the deal attractive to someone providing cash

- How to reduce risks for both the investor and myself

- Recommendations for lenders or investors who commonly work with cash deals for rehab or investment properties

I'm happy to discuss more details privately with anyone serious about funding opportunities. Any tips, connections, or suggestions you can share would mean a lot!

Thanks so much for your help!

Karinne

[Travis Timmons]

99% of the time a "private money lender" that takes down a deal for new or new-ish investor comes from a friend or family member. That part usually gets skipped over on podcasts because it sounds a lot cooler to say that you raised private money than it does to say that mom and dad or your rich uncle gave you money. If you are experienced with a track record of success, it's still hard to get a stranger to loan you their money, but it is a bit more feasible. 

If you have some cash to throw into the deal (10-20%), you can find a hard money lender, but that is expensive money that comes with a shot clock. That puts way too much pressure on the deal to work out as I see it and can end badly. If you are trying to buy a property and have zero cash to put into it, you're just asking for someone to do you a favor by loaning you the money. That's just way too much risk given that you could walk and losing nothing if the deal goes sideways.