Finding Private Money for BRRRR Deals

[Jason Runkel]

I was just curious about peoples experiences with private money lenders. 

A partner and I operate in SE Wisconsin (Racine, Milwaukee, Kenosha area) and have been working with an out of state investor, originally from the area, who was interested in helping us out in acquiring a BRRRR deal weather through private money, a cash purchase on their end and subsequent land contract to us, or a partnership deal. We have brought many intriguing deals his way in the past months but he always seems to get cold feet at the last second, being that this is the first time he has participated in this kind of deal, and letting great opportunities pass.We have been working diligently on finding deals, creating a rockstar team, and even working on obtaining RE licenses, all in attempt to execute on a BRRRR project but it just hasn't come to fruition yet..

A couple questions I have for BP members:

1) What are the most common concerns, objections, etc. you've gotten from private money lenders? Especially new ones? How did you overcome?

2) Have you ever used a first time private money lender? If so, I would love to hear your experience. 

3) How did you find your first private money lender? I have heard of some people starting with hard money, but we haven't found a deal yet that we feel would be worth taking on with hard money due to the cost and risk involved with the current uncertainty in the market, especially with what is going on right down the road from us currently. 

4) How did you get into your first BRRRR or flip deal? How was it structured? How did you finance?

Any other feedback is obviously welcome and appreciated! 
 

[Michael Henry]

@Jason Runkel I think a back of the napkin approach will work best when first presenting to someone you have a relationship with to see if there is interest. You don't want to spend to much time putting a large packet together and they say no. I don't know how many of those you can take before giving up. I would focus on the purchase price, sell price with comps, and cost of rehab, and profit split after closing.  If there is a real interest then you can go into a full scope of work, exact timeline, etc. The last thing is that you should only bring the best deals with good margins projects that have enough meat on the bone to get them excited.