Starting out with Private Money Lenders

[Mark Updegraff]

Hi All, I'm a RE newb to the board and have completed 8 conventional deals in the last 2 years. I just got done reading everything Adam Davis has written on BP regarding Private Money Lenders. Excellent place to start!

I've got a couple questions I'm hoping someone can clarify:

1. The Business Plan: is this specific to a particular deal you are trying to pitch to a potential investor? Does it give all the nitty gritty details like location, purchase price, rehab costs, time line, etc? Or can it be more generic, giving a general overview of what your business does?

2. Offering Documents: can anyone elaborate on what these are exactly, and where to get them. I plan to start with a call to my attorney, but figured I would throw it out here as well.

Any books recommendations or other resources you think would be of use to me would be much appreciated!!

Thanks in advance!
Mark

[Kevin Amolsch]

I agree with both responses and have a few things to add. When you say offering documents that normally means private offering documents which would be when you want to raise lots of money and pool it together. i would say more than $500k and you would need an attorney to handle those. What Will is saying about a note and mortgage is by far the best way to go when you are getting started. I would not worry too much about a business plan. Lenders just want to know they are going to get paid back and that you have a plan to do that. I nice return is helpful :-)

The best way that I have found is to sit down one on one and just talk about it. Dont stress out about a big sales pitch but do anticipate questions and how you will handle them. If it were your money what would you want to know? Those are the questions you will get asked. Once you get one lender it is all down hill. People with money have friends with money.

Stay confident and good luck!