Real Estate Agent · Dallas, TX · Member since 2014 · 19 posts · 3 votes
Hey guys,
I am looking easiest way to find and team up with private money lenders to assist in buying/rehabbing/flipping a constant flow of wholesale properties all through the DFW metroplex. I have a background in Real Estate and as a General contractor. I have the whole team already setup. I just need the proper financing to fund these flips. Let me know if any of you know of any tricks on how to easily find them or if hard money lenders are the easier way to go about it. Thanks!
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
12y
Establish a track record of successfully flipping homes. Alternately, use your contracting skills as what you're bringing to the table. Offer to serve as the GC on the project as your equity in the deal. Investors are going to want to see that you are bringing something of value. Right now, you've just popped up on BP and with your first post are looking for the "easiest way to..."
Although, you might not have intended the post to come across this way, I'll tell you that's not what serious investors want to see. They want to see that you're humble and willing to learn. What you've just communicated is that you know everything, you can handle everything, you don't need anyone's help...you just have no money.
Again, I'm not saying that's what you intended to convey, but that's the way it is coming across.
Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
12y
Its a process, but it does snowball. RE investors are a good place to start, rich relatives, people you know that know you're responsible with money.
The guru courses teach you to pull up county records and see other private loans and semi-market to them. There are hard laws on marketing for that kinda thing so you have to walk a thin line.
My first lender was my dad's secretary. Paid 24% interest. Had it down to 12% and had a mil or so out from 8 people or so back in the day. I've got about $400k in PM from 3 people now, my main one is my roommate who is worth real money and the other two approached me from seeing me borrow and pay back some loans to him.
If you're planning on doing high volume it takes a while to work into the big bucks. Most guys will start you off with a little then give you more as you perform and they compare your return and security to their other investments.
Most private lenders are the ones not looking for you, you have to find them and sell them on the investment. It really is a win-win, but people that have saved up lots of cash don't release it to other people very easily.
Hard Money guys are easy to come by, but most of the time their terms suck. I pay 2pts and 12% to my lenders, but don't make payments and get 100% financing.
Hard money varies, but around here its 4-5 points 12-15% interest and they still want 20% in, monthly payments and a credit app. I had one turn me down on a 40% LTV loan a couple of years ago. I was like "huh?" I've never borrowed from them, but every once in a while I'll see what they can do when I come across a good deal and my money's out. I get frustrated every time.
I'm working on finding some easier to work with and selling some money while I'm out networking for deals, I'll post on here if/when I get it lined up.
Real Estate Agent · Dallas, TX · Member since 2014 · 19 posts · 3 votes
12y
Hey guys,
I appreciate the feedback. Hattie, I wasn't intending for my post to come off like the standard "I watched a flipping show & need easy money because I've got this". I just rewrote my post for advice, because it warned not to ask for money. We all know no one knows it all and if they say they do, they really don't know much.
I know that a proven track record is by far the best way to recruit private money. I just wanted to know if anyone had every tried any other ways to recruit the money. I do offer savings on GC work and Realtor fees. Unfortunately, the more I research hard money seems like the only route for now. I just wish all of these guys didn't seem so sleazy! Not a good feeling to go into business with people you don't trust. Thanks again!