How do I raise private money

Question

Hi

Question? How do I or what is the best why to raise private money to invest or use as a down payment for rentals?

Thanks

Frank

Stuart Udis · Answer

@Frank Saraceno Showing ability to secure debt from credible sources i.e banks or alternative lenders who have longstanding performance track record is important. Personally, as an equity investor, I would want the person I’m writing a check to demonstrate that they can qualify for bank financing, even if there are circumstances where an alternative lender’s terms are in everyone’s best interest.

I would suggest focusing on building those relationships first before seeking out relationships for equity/downpayment funds. Those investors will not show interest if your banking relationships consist of lenders who can't honor a draw schedule as you ran into a few years ago.

Aristotle Kumpis · Answer

I'd have to argue and say not to seek money from family or friends. It's a great way to ruin relationships. I see it all the time. Try looking for local REIA groups or places that you can meet investors face to face. No one will lend you money if they don't know who you are.

John Leland · Answer

You borrow directly from the seller, using them as the bank.

A lot of sellers can justify doing such when they are shown and realize they won't need to pay for a realtor and have the certainty of a sale. They actually come out ahead and you have a house

Erik Estrada · Answer

Hey Frank,

If you are looking for private money to use as a DP, most investors will want to see if you have been able to exit in the last 3 years. They will also likely want a share of the upside. There are HMLs that are comfortable with 90% of the Purchase Price 100% of the rehab costs without any recent experience as long as your FICO is above 740

V.G Jason · Answer

Show you're credible, show you have skin in the game, show a tangible opportunity with upside and how you're protecting the private money's downside.

Divin Kanyama · Answer

Hi @Frank Saraceno , private money usually starts with relationships and trust. Get clear on your market and bring potential lenders a specific deal with conservative numbers, repayment terms, their security, and the risks clearly explained. Friends, family, local investors, and real estate meetups can be good starting points. Just keep everything professional—use an attorney for the documents, follow lending and securities rules, and never promise guaranteed returns. It may take time to build that first relationship, but each conversation will help you sharpen your approach. Stay consistent—a solid deal and honest communication will make raising money easier over time.

Vaibhav Puranik · Answer

Start with friends or family. That's the best way to start. You will need to ensure that you give them a time line to return their money and tell them what kind of returns are expected.

Nicholas Floyd · Answer

One option besides friends and family is to build relationships with local investors, real estate groups, attorneys, CPAs, and other professionals who already work with people looking for places to deploy capital. I’d focus on having a solid deal, clear numbers, a defined repayment plan, and showing exactly how the lender is protected.

Also, depending on the property and your profile, business funding can sometimes help cover part of the liquidity or down-payment requirement without having to raise the entire amount privately. Just make sure whatever financing you use is allowed by the primary lender and that the deal still cash flows comfortably. And if you’re raising money from passive investors, it’s worth speaking with an attorney about the proper structure.

Frank Saraceno · Answer

Thanks but I'm not looking for a house and I know that method. Doesn't work a lot of times either.

Frank Saraceno · Answer

Thanks Erik

Been there done that for eight years and got screwed over from my lender. He basically bankrupted near the end of 2024. What I need is a capital partner for dp assistants.

How do I raise private money

How do I raise private money

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