Raising Capital - How do I Get Started???

When speaking with new investors, their most common fear is their lack of capital. I find myself explaining to these investors that finding a good deal is much more difficult than finding capital. I would argue that the following law of nature actually exists: “find a good deal and you will find the capital.”

The first piece of advice is to quickly focus one aspect of investing. Some investors may prefer to flip properties while others prefer to buy income property. Your focus will be predicated on the market you are in and type of properties that are most readily available. The next two pieces of advice will help you select your focus. Remember, you can always modify your focus to better match the opportunity in your specific market.

My second piece of advice to investors is to reach out to local hard money lenders. Hard money lenders are excellent sources of information for contacts in the industry, target markets, and types of deals (fix & flip, income property, construction) that are most common. A good hard money lender is always looking for new borrowers so most are happy to get you started assuming you will be client in the future.

When speaking with hard money lenders, quickly introduce yourself and explain your real estate investment strategy. Ask them what advice they can offer in terms of contacts (brokers, contractors, etc.), types of deals they would be willing to fund including their loan structure, and the process of obtaining capital from them.

The third piece of advice is visit your local real estate investor group. In San Diego, we have three monthly events that many seasoned real estate investors attend. Spend the time to network and find those investors that are active. I always suggest that new investors partner with a seasoned investor and help them locate deals and/or manage existing deals. You will get a lot more out of being actively involved with a seasoned investor vs. buying an overpriced weekend seminar.

Getting started in real estate investing can be daunting adventure. However, by recognizing that raising capital is much easier than most people recognize, a new investor can spend their time focused on locating their first deal. Spend time creating an investment and leverage the seasoned veterans, such as hard money lenders and local real estate investment groups, to get you to get started. Good luck out there!

For more information on getting started please do not hesitate to visit www.talimarfinancial.com or contact Brock VandenBerg at (858) 613-0111 x1.