Chicago, IL · Member since 2015 · 298 posts · 261 votes
10y
@Trina C. I have not seen anything rude in any of the responses you got. Some are just more blunt and ask very pertinent questions. Not everyone in a public forum is going to pleasantly state their advice or opinion.
I was and am in your shoes (looking for money) and I find that those who provide the blunt answers usually make you think about what you need to do and how to present yourself. The other advice given is excellent and will get you on your way. But when pros who have been in the game 10x longer than you have asks a blunt question it makes you think (at least it makes me think). It then forces you to figure out how to answer the question or counter their point and in doing so gives you a better arsenal for getting that favorable outcome you want.
I just caution you not to take bluntness as rudeness. In this real estate game thick skin is required and if you think anything said here was rude then wait till you start interacting with sellers, buyers and contractors on a regular basis.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
10y
@Trina C. Private lenders are friends family and associates that know and trust you. The way to find them is simply talk about what you do and your successes. Eventually people will ask "How can I get involved"
So maybe you don't have any successes yet. Talk about the deal that got away. "I just saw this amazing deal. I had to pass because I didn't have enough money. If I only had the money . . . . " Before you know it someone will ask "Well how much money would you need?"
Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
10y
I thought it would be easy as well. Not so much!
@Ned Carey is right. Just talk about what you want to do, the deals you could have made. If you do have a story about "the deal that got away" then follow that property! If you have no success under your belt, then that killer deal you could have done will become a real deal that someone actually did that you can use to prove your point. Until they trust you, you will have to find a way for them to believe that you aren't just blowing smoke.
I think the bast way to get them is to demonstrate your success. Kind of a catch 22... you want their money to be successful, but to get their money you have to prove you are successful. But once you get that first deal done you go from the "I THINK I can do stuff and I want to experiment with your hard earned money" to "Check out what I'm doing. If you want to be a part of it you can."
Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
10y
Trina I think you're talking about a hard money lender. Yes they will lend, but they will require a down payment, and most likely you'll have to fund the repairs, especially if you don't have an established track record with a lender. The private money @Ned Carey and @Bryan O. were referring to more often than not doesn't require a down payment and you can finance the repairs as well. That's your best bet.
Investor · Fayetteville, GA · Member since 2015 · 87 posts · 20 votes
10y
@Ken Bringing intelligence, time, knowledge, credibility, integrity and some "Skin" to the deal. Nonetheless, it's obvious that it's not enough "Skin" for the Hard Money Lenders which explains why I am inquiring about Private Lenders instead.
Investor · Fayetteville, GA · Member since 2015 · 87 posts · 20 votes
10y
@Ken We all must start somewhere and likely with a company that does allow for that parameter. Therefore, if your company does not have room for inexperienced investors to earn additional profits then no problem...that's your company's discretion. However, there are companies who will. NOBODY was born doing what they do whether novice or expert...we all start inexperienced then grow to gain experience. Furthermore, if you have nothing to convey in a positive, encouraging, motivating, enriching or helpful manner of contribution then please proceed to scroll past my comments or questions.
Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
10y
Hi @Trina C.. There are large private money investors out there, but they tend to have similar rates as hard money because they are acting in the same capacity. The ones I've seen still require your own money in the deal. I am sure you are right that there are some that don't. By funding more, it allows the private lender to have more money at work on potentially larger projects, and the flipper to do more because they don't have to have a ton of capital to dump in. Of course, getting to that point with a lender requires proving your ability, possibly many times.
You are absolutely correct that everyone has to start somewhere. If you don't have private money right now or they are on the fence, take the small cut in profit to use hard money so you can build that reputation and prove that your work is as good as your planning. That may be what gives you the pot of gold you are after. By all means keep up the search and I hope you find it, but a smaller piece of a great deal is better than 100% of no deal. Best of luck.
Investor · Fayetteville, GA · Member since 2015 · 87 posts · 20 votes
10y
@Bryan EXCELLENT!!!! Now that was well said (written)! I can appreciate what you are saying and I like the intelligent manner in which it was displayed. Thank you, Bryan.
This site is wonderful & informative! Nobody has the right to be rude or condescending regarding anyone's questions and/or comments.
I recently read a comment by a Hard Money Lender in California (Barbara M) who responded to someone that was RUDE to an individual merely wanting clarification on a question. Barbara said the following........... "We all started somewhere, and I am pretty sure that when we all started we had a lot of questions. I don't find the point of people being rude. If you have nothing good to say, might as well not say anything at all."
Thanks to all of the classy and intelligent people who can convey the good, the bad and the ugly in a good spirited and enlightening fashion. Peace to you!
Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
10y
Trina C. , try to do a Joint Venture with someone who can bring capital, contractor skills, project mgt, or a combination.
It will allow those who do not have the time to devote to real estate but still want to get involved a way to do it - through you.
You have some very valid questions you raised and they are some that I have been thinking about.
I do like some of the answers they were given.
I am talking to people that will listen as I am also trying to raise money from private investors as I have used all my equity on the last deal. I have found another deal so I am now looking to find a backer / partner /investor.
So keep telling people your story and you will be successful.
Investor · Fayetteville, GA · Member since 2015 · 87 posts · 20 votes
10y
@ Philip Hello there and thank you. I have been educating myself by doing lots of research, studying and reading. Asking questions & getting responses from those who convey information in an intelligent & caring manner is always fantastic while learning. I certainly appreciate those who care enough to respond and elaborate in a way that adds value to our quest. We are all striving to succeed and prosper. It's awesome having access to colleagues that are "like minded", highly motivated, inspirational, knowledgeable and good spirited.
I'll be prayerful that you find an investor and/or partner. Thank you for the kind words! Much success and prosperity to you as well.
Trina C. , try to do a Joint Venture with someone who can bring capital, contractor skills, project mgt, or a combination.
It will allow those who do not have the time to devote to real estate but still want to get involved a way to do it - through you.
I would imagine that most people open to a joint venture would want someone with some experience, though. Wouldn't they?
True, however if you have someone with more experience than yourself who is willing to put in the time, that is a huge plus.
When I wanted to get into REI, I myself provided the capital (private lending) to a trade person who wanted to flip houses but didn't want a hard money loan.
There are steps you can take to protect yourself as the investor (deed in investors name, progress payments on rehab, etc).
Not saying this is an easy option, but an option nonetheless.
Chicago, IL · Member since 2015 · 298 posts · 261 votes
10y
@Trina C. I have not seen anything rude in any of the responses you got. Some are just more blunt and ask very pertinent questions. Not everyone in a public forum is going to pleasantly state their advice or opinion.
I was and am in your shoes (looking for money) and I find that those who provide the blunt answers usually make you think about what you need to do and how to present yourself. The other advice given is excellent and will get you on your way. But when pros who have been in the game 10x longer than you have asks a blunt question it makes you think (at least it makes me think). It then forces you to figure out how to answer the question or counter their point and in doing so gives you a better arsenal for getting that favorable outcome you want.
I just caution you not to take bluntness as rudeness. In this real estate game thick skin is required and if you think anything said here was rude then wait till you start interacting with sellers, buyers and contractors on a regular basis.
Investor · Mc Lean, VA · Member since 2015 · 75 posts · 48 votes
10y
Let's pump the breaks if we could.
@Trina C. I would have to agree with @Nnabuenyi Anigbogu, please do not confuse directness with rudeness. A lot of good information has come from this thread. Sometimes, however, it is hard to hear what you don't want to hear.
I started reading this thread because I want better options for two deals that I have upcoming. I had everything planned out, I was going to do a cash deal using some stock options I have. The problem is, last night I heard from my broker that his investor is only looking for one tenth what he originally thought. At first I was angry, but what it forced me to do was to look at other options. Last night I applied for private lending, crowdfunding, and have contacted some old contacts who might be looking to get a return for the money they have shoved into their mattress.
When I read @Account Closed's responses, it lit a fire inside of me. Get out there, nobody else is going to make this happen.
The cold reality is that I might have to drop one or both of my deals.
Trina, here are some of the places I have looked for money:
Consider too another option, become a lead generator for another investor. Take a fee for bringing the deal in, and start building your capital that way.
Find a partner, even if they reap most of the rewards. This will help you get more successful deals completed.
Investor · Fayetteville, GA · Member since 2015 · 87 posts · 20 votes
10y
@Nnanbuenyi This is professional site not a social foolishness site whereas you just word things anyway you like. Advice and opinions can be conveyed in a manner that is pleasant & blunt at the same time. Blunt does not mean it's okay to be rude!!!!!!!! It's not what you say but how you say it. I have no problem with honesty, truth or bluntness but I do have a problem when it's displayed in a condescending and demeaning manner. Thick skin is required in life yet it does not justify ugliness in attitude. There is nothing helpful about a distasteful attitude no matter how much knowledge one has or how smart he/she may be.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
10y
Dearest Trina,
Not only do we need skin in the game in some fashion, we also need much thicker skin.
I'm sue you've read some of my posts that get to the point quickly and doing so may sound rude. It's never personal. (unless fire comes from my worn out finger tips, it can be personal to me but not addressed so to others, LOL)
What you need is more knowledge so that you can bring more entrepreneurship to the table. When you lack capital more management or labor has to be added. The more capital required, the more management and or labor must be added.
When you have no money skin in the deal, you need to fairly assess the value of your skills and what you do bring to the table.
You can't really rely on the deal at hand. You'll see many saying find a really good deal and the money will come......not really true either. It's how you structure the deal too.
As Ned and others pointed out, private money comes from those who don't lend as a business, but that's not to say someone with money doesn't want a good business relationship. If they aren't basing their loan to you on love and affection, they need to earn more than they are otherwise getting.
They are also concerned, very concerned when they have no lending experience, about risk. First thing I want is the return of my money, then we can talk about the return on my money.
Getting private money will never come from an elevator pitch (unless you're on TV). Trust has to be established. Beyond trust, competence must be demonstrated.
As others have mentioned, competence is more often judged by experience, but that's not always the case.
Trust is usually built on a personal relationship, I don't trust just any bank to give me good service.
Social relationships build trust. It takes time to establish trust, it also takes time to demonstrate competence.
If you go to a CPA or a stock broker, how can you really gauge their experience? Often it's just from gray hair. It's more about them demonstrating competence and knowledge, not how many clients they have or the size of a portfolio. (Which BTW, those types of measuring sticks may tell you that you won't be getting their attention). Would you only buy life insurance from an agent that has the most clients and owns millions of dollars of coverage on themselves? No, it's reputation, trust and confidence.
You also need to understand that if you're paying a tax rate of 15% and your money guy is paying 39.6% they need to come out over 2 and a half times better than you to keep the same money! The cost of their money may be much higher than yours. So, how you structure a deal makes a big difference, they may not be as greedy as it appears.
You'll also find that the private lenders who will have more confidence in you, trust you and will fund a deal are distressed sellers who have more to gain than just interest. Start there, that builds experience.