Raising Private Money

[Joseph Gibbs]

When raising private money from your friends, family, network, and beyond, what kinds of returns do you guarantee? Do you you guarantee a certain dividend for cash flow properties or a lump sum at the end of a FLIP or refinance? What margins/percentages do you look for to motivate others to give you money for leveraging your investing potential in real estate?

I am curious what your approach is to the numbers you consider for raising private money.

[AJ Shepard]

@Joseph Gibbs

We’ve partnered and gone the syndication route. When partnering it is best to listen to what the other person wants and possibly propose some different scenarios. Do they want equity, do they want just a return, do they want to participate in the upside or just looking for coupons to clip. Putting your best foot forward is also important. Make sure you’re knowledgeable about the product or way you are going to make money in real estate and show that off.

Good luck.