So I have a few targets for private capital for my next few deals. Do I get the property(ies) under contract first or do I see if my private capital sources would be interested first? I would have a hard time finding bank financing if the private capital fell through as my credit was shot down after I closed on my first mortgage (little credit history) any suggestions? How do other people find this solution? Thanks!
HMLs and/or private lenders can usually move fast. (I once closed a loan in two days). You are looking for an asset based loan, so credit, while important, is not as critical as security in the asset.
@Bryan Clement You mentioned for bank financing the issue is just too little credit history. Consider getting a secured credit card or two, make payments for 6 months +, and it should bring your score into a qualifying range. At least that would open up more options for you.
Thank you guys! @Tom S. I have accounts that I'm paying on, the problem is I have quite a few of them and I've only had them for a year and a half at most. Any other suggestions? I did just get a student card for myself to try to get my credit score up. Hopefully that will help!
I would get verbal interest from private money investors first. Because when you are speaking with lenders, they are going to want to know how you are going to fund the deal.
Figure out what their return goals are and ask them "if I were to find an opportunity that meets your return goals, would you be interested?" That way, you know approximately how much capital you are capable of raising, which let's you know what sized deals to look at.
Thank you @Theo Hicks , that's great advice!