Finding equity partners and private money

[Sterling Scott]

I'm working on a good size portfolio of single family rentals in the KCMO market. I was working seller financing to be able to do this deal but I think the owner is going to want more than I can put down. How do you go about building the connections to bring in private money and equity partners for several hundred thousand to a million? I know they say that if you have a good deal you will be able to find people, and I think I have a great deal as the package is nearly 60% of the market value, but I am not sure where to look and bring in the partners from. Thanks! (potential for 20+% cash on cash) 

[Taylor L.]

Write a list of people you know and start there! Be careful, though. It's important to make sure you have a legally compliant structure/deal before approaching potential partners or investors.

This is an area where it's best if you dig the well before you're thirsty. Always be building investor/partner relationships. 

[Karen Margrave]

Unless you have the property tied down, it's risky posting it on a public forum. However; if you have it secured in some way, and you have all the details to discuss with a potential partner, etc. put it on Classifeds. You don't have to give out all the numbers on the post. Just put the basics KCMO RENTAL PORTFOLIO . Looking for financial partner.... 

[Alex Olson]

There are quite a few meet up groups in KC. They are sorta small or off the radar. I know a few people you should meet in KC if you want to chat. 

[Don Konipol]

Quote from @Sterling Scott:

I'm working on a good size portfolio of single family rentals in the KCMO market. I was working seller financing to be able to do this deal but I think the owner is going to want more than I can put down. How do you go about building the connections to bring in private money and equity partners for several hundred thousand to a million? I know they say that if you have a good deal you will be able to find people, and I think I have a great deal as the package is nearly 60% of the market value, but I am not sure where to look and bring in the partners from. Thanks! (potential for 20+% cash on cash) 

Two choices - raise the capital yourself or partner with a professional syndicator.
raise capital yourself - Reg D 504 B or C or rely on the general exemption for private placements.  Reg D will cost $8,000 - $20,000 but will insulate you from most potential litigation and make .capital raising easier by opening up investment  opportunity to the majority of investors who will only invest in Reg D offerings.  General exemption for private placements will be cheaper - $2,000- $5,000 but fewer investors will be interested and you won’t have a statutory defense if sued for securities violations, and no guarantee SEC or state securities board won’t decide that you’re out of compliance with private placement exemption.  You can raise capital through existing relationships with people in your network (family and friends), people you meet at real estate meetups, or online promotion (only if Reg D 504 C offering is utilized).

Teaming up with a syndicator relieves you of all of the above.  The cost is giving up a significant part of the promotional fees

[John Boutros]

Quote from @Sterling Scott:

I'm working on a good size portfolio of single family rentals in the KCMO market. I was working seller financing to be able to do this deal but I think the owner is going to want more than I can put down. How do you go about building the connections to bring in private money and equity partners for several hundred thousand to a million? I know they say that if you have a good deal you will be able to find people, and I think I have a great deal as the package is nearly 60% of the market value, but I am not sure where to look and bring in the partners from. Thanks! (potential for 20+% cash on cash) 

 Few steps:

1. Get REALLY good at deal finding. Find the best off market deals, and believe me, cash will find you. This takes time and work.

2. You need to build a ton of relationships with people that know, like and trust you that are willing to invest with you. Unless you have millions to play with, you will need OPM. This takes time and work. 

3. Be aware of the laws and ensure you comply - SEC 506b and c. 

Good luck.