How do I raise private money

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Aristotle Kumpis
Specialist · Long Beach, CA · Member since 2011 · 877 posts · 398 votes
1w

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.

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  • Vaibhav PuranikPro Member
    Member since 2025 · 76 posts · 40 votes
    1w

    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.

    [email protected]
    1Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      1w

      I don't to go that route. Beside my friends and family don't have any money.

      0Reply
  • Aristotle Kumpis
    Specialist · Long Beach, CA · Member since 2011 · 877 posts · 398 votes
    1w

    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.

    3Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      1w

      Yeah I agree with the friends and family about not asking them. I've been there with the REIA events too. A lot of these guys are just talk. I've been doing this for eight years. I just want to see if there's anything else out there.

      0Reply
  • William O'Gorman
    NJ · Member since 2025 · 18 posts · 4 votes
    1w

    Hey Frank, I work with a private lender that handles rental and investment property financing. If you already have a deal in mind, he may be able to go over some options with you. What are you looking to purchase and roughly how much capital are you trying to raise?

    0Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      1w

      Hey William

      I have a few I'm looking at. I have some lenders in mind. It's the capital I'm looking to raise, about $250-350k. I'm willing to do an equity share or something of that nature.

      0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    1w

    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.

    1Reply
  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 361 posts · 133 votes
    1w

    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.

    [email protected]
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    1Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      1w

      Hi Divin

      Thanks for the advice but I've been investing for eight years flipping. I had a relationship with a lender from the beginning until near the end of 2024 when he bankrupted me because he ran out of money. So I've been trying to get back in the game.

      0Reply
  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1w

    @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.

    [email protected]
    2Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1w

    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

    [email protected]818-269-7983
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    1Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      1w

      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.

      0Reply
  • John Leland
    Specialist · I give advice - [email protected] - I focus on states where investing is profitable, reasonably safe & secure · Member since 2026 · 73 posts · 15 votes
    1w
    Quote from @Frank Saraceno:

    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

    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

    1Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      1w

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

      0Reply
  • Nicholas FloydBusiness Member
    NY · Member since 2026 · 214 posts · 83 votes
    1w

    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.

    1Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      1w

      Thanks for the info. I'm an investor and been doing it for eight years but got screwed over with my lender near the end of 2024. I'm trying to get back in the game.

      1Reply
    • Nicholas FloydBusiness Member
      NY · Member since 2026 · 214 posts · 83 votes
      6d

      @Frank Saraceno 

      Sorry to hear that, Frank. After eight years in the business, I’m sure you’ve seen how important having the right lending relationship can be. If you’re working on getting back into deals, I’d be interested to hear what type of properties you’re looking at and what kind of capital you’ll need. I work with several business funding options, so if there’s a way I can help you put together another source of capital, I’d be glad to point you in the right direction.

      1Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      6d

      Thanks. Yes I would be interested in different options.

      0Reply
  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1w

    @Nicholas Floyd I don’t believe it’s wise to keep promoting credit cards as a replacement for down payment equity. What happens if the properties don’t sell or a refinance doesn’t generate enough proceeds to pay off the credit card debt? You’re then paying high interest on the down payment portion of the capital stack, without a clear repayment source.

    Business credit is better suited to bridging temporary cash flow gaps when there is an identified source of repayment. The construction draw process is a good example. Lenders typically reimburse improvements after the work is completed, so additional liquidity is often needed to purchase materials and pay subcontractors. Using business credit to cover those eligible expenditures can help a project move more efficiently, provided the expected draw can repay the balance and there is enough cushion for delays.

    Also, most lenders want to understand where the downpayment funds and closing costs come from. If they knew the down payment was credit card debt, most would have a difficult time approving the loan.

    [email protected]
    1Reply
    • Nicholas FloydBusiness Member
      NY · Member since 2026 · 214 posts · 83 votes
      6d

      @Stuart Udis 

      That’s a fair point, and I agree that business credit shouldn’t be used recklessly or to get around a lender’s equity requirements. Any source of funds should be fully disclosed and fit within the lender’s guidelines.

      My point is that business credit can be another liquidity tool when it’s used strategically—especially for rehab expenses, materials, contractors, carrying costs, or temporary cash-flow gaps where there’s a clear repayment plan.

      I always encourage investors to run the numbers, understand their exit strategy, leave room for delays, and only leverage what they can realistically afford to repay. The goal isn’t to replace sound deal structure, it’s to give qualified investors additional access to capital when it makes sense.

      1Reply
  • Kevin Jordan
    Lender · Indianapolis · Member since 2026 · 1 post · 0 votes
    6d

    Frank, I work with 3 groups of Private Money Lenders. Generally, if you have successful deals in your portfolio that you can show as a track record, have some liquidity that you can show, and a respectable credit score 700+, you can raise private money. It is simply a matter of finding a group where you can connect. Pace Morby's Gator group is hit or miss, especially if you can't find a senior member that has dozens of deals under their belt and is confident in navigating fairly. Money Mall America is a group that deals across the country, has their own title company, structures insurance and collateral, and has dozens of loan programs depending on your deal and need.

    In short, Private Money Lenders that are in the business of private money lending are where I would go. You don't have to explain the business deal like you would to a friend or family member, and seasoned lenders can help you structure a deal to support your project. I'm happy to help you connect with some people if you want.

    Best of luck.

    0Reply
  • Brandye Richardson
    Lender · Tampa Fl · Member since 2026 · 18 posts · 6 votes
    6d

    Frank, with eight years of flipping experience and several properties under consideration, the strongest approach is to present one complete deal at a time rather than a general capital request. Include the contract price, as-is value, rehabilitation budget, projected value and rent, your contribution, requested capital, investor security, timeline and exit. Any equity-sharing arrangement should also be properly documented with legal and securities guidance.

    1Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      3d

      Hi Brandye

      I'm pretty much done with flipping unless a get a great off market deal and there's enough spread to make a good profit.

      0Reply
    • Brandye Richardson
      Lender · Tampa Fl · Member since 2026 · 18 posts · 6 votes
      3d

      That makes sense, Frank. If flipping is no longer your main focus, the more useful question is what you’re moving toward next—long-term rentals, small multifamily, notes, or another strategy. If a strong off-market opportunity does come up, share the purchase price, as-is value, rehab budget, projected value or rent, capital needed, your contribution, timeline, and exit so it can be evaluated as a specific deal rather than a broad capital request. What property type and strategy are you pursuing now?

      0Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      3d

      Looking into multi, str, long term rentals. That's why I'm trying to raise money for down payments.

      0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    5d

    Typically it'll be very challenging to raise money for rentals because it will be second-position debt behind a first-position lender. My advice is for people to save up to buy their first rental and make sure they have plenty of liquidity to fix things, as stuff will definitely break

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  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    5d

    @Frank Saraceno you have been an investor for 8 years. What has your actual track record been? How many wins and how many losses? Have any of your lenders lost money with you before?

    Success attracts money. I have raised millions of dollars in private money to do deals. I started to meet up about nine years ago. And at the meet up, I just go over the deals that I’ve been doing and I show people what I’m doing in real estate and how I am doing it. I started with an earn and learn program where people could lend to me on the deals that I’m doing, and their loan would be secured by a second position note in the property and then I would put them on my WhatsApp group where I would show them what I’m doing and how I’m doing it with the property that they have lent on so they could see the whole process. People that were interested in learning about Real Estate were happy to lend $10,000 or $20,000 to be part of a deal that they could watch from start to finish.

    That’s what I did.

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    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      4d

      Thanks for the info Shiloh.

      0Reply
  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    4d

    It appears, @Frank Saraceno , that you were flipping houses and are now changing strategies to rentals. While flipping, you made the fatal mistake of not insisting that your lender fully fund your loan and hold the unused construction funds with a neutral party. This way, you could be assured that the funds would be available as your construction progressed.

    During the GFC, it was common for lenders to double-dip and reloan your construction funds, only to run out of money themselves, leaving the borrower in a lurch. Since then California, at least, has required that brokered construction funds be held and disbursed by a construction management or escrow company.

    I'm sorry it's too late for you now, but that's beside the point. Short-term bridge loans, such as these, are inappropriate for the rental properties you are now considering. Instead, you should be looking for DSCR loans, which are mostly offered by larger lenders.

    DSCR lending is an incredibly competitive business, and the rates are significantly lower than the short-term bridge rates you're used to. DSCR loans are also typically written for 30 years, suitable for rentals, rather than the 6 to 12 months typical of bridge loans made for flips.

    Go to the member list at the American Association of Private Lenders or the lender list on Scotsman Guide, and you can contact these lenders directly. BiggerPockets also has a list.

    In addition, you've probably already received a hundred DMs from unknown, unproven brokers and affiliates here, so be careful. I think you learned that lesson already.

    1Reply
    • Frank Saraceno
      OP
      Investor · Blackwood, NJ · Member since 2026 · 13 posts · 4 votes
      4d

      Thanks for the info Jeff.

      1Reply
  • Mark Cruse
    Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
    3d

    This place is so wack. So many of my heavy hitters I run into told me you couldnt pay them to waste time.

    Later..............

    0Reply
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