Raising Private Capital

[Jesse Nguyen]

Hello there everyone!

My name is Jesse and I'm a real estate investor and I'm doing a partnership with a friend in St. Louis who worked as a wholesaler for the last two years and now we're transitioning into the buy and hold game. My partner is finding extremely juicy deals with 35-50% equity capture after renovations but, we keep having to turn these properties away because we can't get our private financing in line quick enough. The deal flow is there but the private capital flow isn't quite there yet.

Do you guys have any tips on raising private capital? I've had about 10 meetings with friends that have known me for about 1-2 years over these last 2 weeks and I believe only 2 of them have expressed interest in investing in those STL projects as private money lenders.

My partner and I current have 7 units in our portfolio and we're looking to expand our portfolio to 150 units in 2020 but, to do this, we need to raise about $5 million.

[Andrew Postell]

@Jesse Nguyen any reason why you aren't just getting a loan for these properties?  

[Jesse Nguyen]

@Andrew Postell We're not getting loans on these properties because they're distressed properties from distressed sellers and 8 times out of 10 would not qualify. Plus, you can get a better price if you could close in 1-3 weeks with cash.

[Andrew Postell]

@Jesse Nguyen there are loans that are designed where you can buy and rehab a distressed property. They close the same as cash. This is the normal way of buying properties with the BRRRR method. I hope that makes sense how I am describing this. You just need a lender that can close the same as cash is all. Oh, and I am assuming you have heard of the BRRRR method? If not, let me know and I can expand on that further.

[Andrew Syrios]

First and foremost, pick up @Matt Faircloth's book on the subject, which you can find here.

[Alina Trigub]

@Jesse Nguyen

The investors are typically looking for experience and track record, as well as how well do they know and trust you. It takes time and effort to build the relationships. So you have to be patient with that. 

As alternatives, look for private lenders or HML to get the properties.

Here's also an article to help you further: 

https://www.biggerpockets.com/member-blogs/10850/84894-where-can-i-find-investors

[Jon Lester]

Quote from @Andrew Syrios:

First and foremost, pick up @Matt Faircloth's book on the subject, which you can find here.

 I'm trying to find a workbook with practice/recap notes from this book.  Any ideas where I could get my hands on something like that?

[Andrew Syrios]

Quote from @Jon Lester:

Quote from @Andrew Syrios:

First and foremost, pick up @Matt Faircloth's book on the subject, which you can find here.

 I'm trying to find a workbook with practice/recap notes from this book.  Any ideas where I could get my hands on something like that?

 Not sure, but you might be able to find something on the author's website: https://derosagroup.com/learn-...

[Jon Lester]

Quote from @Andrew Syrios:

Quote from @Jon Lester:

Quote from @Andrew Syrios:

First and foremost, pick up @Matt Faircloth's book on the subject, which you can find here.

 I'm trying to find a workbook with practice/recap notes from this book.  Any ideas where I could get my hands on something like that?

 Not sure, but you might be able to find something on the author's website: https://derosagroup.com/learn-...

 Thanks. They didn't have it directly, but I messaged them to see if that's something they know where to source.

[Andrew Syrios]

Quote from @Jon Lester:

Quote from @Andrew Syrios:

Quote from @Jon Lester:

Quote from @Andrew Syrios:

First and foremost, pick up @Matt Faircloth's book on the subject, which you can find here.

 I'm trying to find a workbook with practice/recap notes from this book.  Any ideas where I could get my hands on something like that?

 Not sure, but you might be able to find something on the author's website: https://derosagroup.com/learn-...

 Thanks. They didn't have it directly, but I messaged them to see if that's something they know where to source.

Well hopefully they have something. Regardless, I would still recommend reading the book or listening to it on Audible.