A New Real Estate Investing Lesson I Just Learned About Raising Private Money


Just when I thought I had all the aspects of raising private money figured out, I get slapped across the face with a new lesson. I suppose I deserved the slap across the face given I got overconfident in thinking I had “learned-it-all”.

This lesson didn’t come in the form of a sales technique or anything of that nature, it simply came from “who” the potential private money lending demographic is. Maybe this is just me, but I’ve always been under the impression that you should be targeting the, how do I put this politely… the “generation with more life experience”. These are the people that have had ample time to save money, and more than likely, have liquid funds where they simply want to put somewhere and get a steady return on them.

This “thought” on my part was recently blown to shreds..

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Private Money For Real Estate Comes From All Directions

Before I get into the meat and potatoes of the story, let’s first go over a bit of background. Although this is not the point of my article, it does provide some valuable insight about how private money connections can come from ALL aspects of your life.

One of my wife and I’s really close friend group members got a boyfriend about 6 months or so ago. I’ve gotten to know him through church, “game nights”, and just causal hang-out sessions. It’s always been a good time, but the furthest thing from my mind was “Hey, this could be a potential private money lender!”. He wasn’t a doctor. He wasn’t a lawyer. He wasn’t in a high-up management position at a Fortune 500 company.

Lastly, he was not in the “generation with more life experience” category…

Private Money for Real Estate Comes from All Ages

This relationship which had formed through a friend was with a 23 year old! I don’t want to make a sweeping generalization here, but my stereotype and mindset towards this age range falls into a few different categories:

  1. Debt Ridden and/or still in school.
  2. Has no interest in their financial future. “I’m young, I’ll worry about it later” type attitude.
  3. Simply has not had enough time to accumulate any sort of investment income.

Strike 1! Strike 2! Strike 3! I was out! This individual proved my stereotype wrong on all three accounts.

Not only was this person debt free (never went to college), but he told me how he had set up a ROTH IRA while he was in high school! I don’t know about you, but in high school I would have given someone the “Are you even speaking English?” look had they brought up a ROTH IRA to my attention. On top of all this, he had saved some a solid chunk of change that put him in a category of being able to do some real estate private lending.

Taking Action Generates Most of the Interest

What do I mean by this? The 23 year old learned about what I did by both hearing me causally talk about it and by seeing a property ‘before’ we started on it, and ‘after’. Because his girlfriend is apart of my demo/clean team, she decided to take him through the property during one of their dates. They were in the general area so she decided to drop and show it to him.

While this is not always the case, by simply taking action and getting product (houses) on the market, there will be instances like this where marketing is being done for you (whether intentional or not doesn’t matter) for free. It’s not like I told the girl, Danielle, to go “get your boyfriend interesting in real estate and private lending!”, it was just one of those things that happened.

Point being, this event would have had zero chance of happening if I had never taken action in the first place.

Related: How to Raise Private Money Anytime, Anywhere. Even Over Chicken Wings!

Meeting with a Potential Private Money Lender

At the time of me writing this article, I just met with this potential investor last night. Him and his girlfriend Danielle were on a date so they invited me out afterwards for drinks. We met at Applebee’s and had a great conversation. This brings up a few points (keep in mind, each one of these points could be a blog post in and of itself)…

  1. Don’t just start ramming stuff down their throat about you and your company. Let them dictate the direction of the conversation.
  2. Have Marketing Material. Right at the beginning of the conversation, I slid him my marketing packet and told him this should really help him out with anything we may miss out on during the conversation.
  3. Don’t BS*. Be honest. Don’t make yourself sound bigger than you are. Don’t make it seem like your company is worth millions of dollars (if it isn’t). Tell the investor the current status and where your goals are.

* This is a huge and common theme through the podcasts. If you are not listening to them, why not?!?!?!

Click here to listen to the 16th Episode of the BiggerPockets Podcast, with me!

When the meeting was done and over, he had a much better understanding of how it all worked and was very interested. Being 23 years old and in the position he was, he’s obviously wise beyond his years, so he didn’t make any rash decision there and then. What did happen was that he was going to “talk it over with his parents”. This is what I hope will be the beginning of a “domino effect” for word-of-mouth marketing. I’ll just have to sit back and see where this all goes.

Lesson Learned from this Experience

Private money is floating around you at all times. Even if you are hanging out with or having a conversation with someone younger, you just never know. Don’t be like me and assume that the younger generation has no ability to get involved in private money real estate lending.

I think I would probably argue this individual was more of a needle-in-the-haystack type in terms of his financial uniqueness, but even so, it still doesn’t  take away from the big lesson I learned of younger does not equal no money to invest.

Keep your ears open. As I learned, the eyes can be very deceiving.

Photo: Unhindered by Talent

About Author

Clay (G+) is a licensed real estate agent and the owner of Huber Property Group, LLC, a real estate investment company located in Grand Rapids, MI. His company purchases distressed properties with the main exit strategy of fixing them up and reselling with owner financing, particularly, land contracts.


  1. Hey Clay very good article and very true. We have raised over $2.5M in private investor funds and counting. ONe of the early ones was a delivery man from Home Depot. He was checking us our behind our backs on the two sites we were working on. Asking if we were paying our bills, good to work for, cobbing our work, etc. When he found out were were legit, he approached us. We were always kind and nice to hi and also very appreciative as he was delivering our goods! low and behold, he became one of our early investors. You are totally right…You just never know, and money will come from the most unexpected places if you are open to it! Again, great point for people to know.

    • Thanks Glenn.

      That was an awesome story about the Home Depot guy on your podcast. One of those areas where I personally would have NEVER guessed it.

      Whether it be a Home Depot delivery man, or a 23 year old kid, you’re right… it can come from the most unexpected places.

  2. Nice! Aha moment!

    “When you Assume, you make an ___ out of U and Me!” lol how many times I have done that! Duh!

    A related point,

    An elevator speech is an invaluable tool.

    “What you do for a living?”

    “I have the best JOB in the world,
    – I help sellers sell FAST,
    – I help Renters Lease 2 Own a Dream Home,
    – And I help ordinary people get a great return investing in real estate as a private lender.”

    “What do YOU do?”

    Clay, U Rock!

  3. Dell Schlabach on

    Very good article. I think this is what people need to hear that are trying to raise private money. Borrowing private money in my experience is about building relationships, finding out what people want, and giving them that, much more so than it is putting together polished presentations to people who don’t know you, and your reputation.

    It is one of the lessons I learned early on when raising private money, many times it will come from unexpected sources, people you wouldn’t think had a lot of money. The other thing I noticed, is once they have done one loan, many times after the first one has performed well, they offer more, and more, and more and then they start referring friends. Especially if you offer them 500.00 for a referral that invests with you : – )

    Sometimes in the course of people overhearing conversations or observing what you are doing, they will ask to lend.

    One time I was walking through a coffee shop, my office was in the back of the same building. I ran into an acquaintance sitting with a couple of his relatives. Chatted for a couple minutes, told him kind of jokingly, he should invest some of his rusty money with us, could get a better return than with his cds. He asked about the business I made a couple positive comments about the rehab business and that we are paying 10% on money to individual lenders.

    Young niece, maybe 25 years old seemed to be paying keen attention, asked a couple questions. I laid a couple business cards on the table, told him it was good to see him again. The next day I get a call from the young girl, said they had 50,000+ they could loan, they are saving money for a down payment on a house they want to build in a year or so. She ended up lending on a rehab, and referred one of her relatives who started lending.

    I have had quite a few people who came to me, referred by friends. Call a couple weeks ago, an old friend who I had not seen in years, who is a friend of friends, apparently two of my friends had just had conversations with her that week, she was looking to invest some money from a business she sold recently. They both recommended she talk to me, she is now set to do her first project with me, has 150,000 available.

    Another time, was having a conversation with one of my lenders, while on a date with, after the phone call, she asked. What kind of deal are you doing? brief explanation, she said, could I do that? She didn’t have much savings but had a sizeable home equity line available to do a couple projects.

    My realtor just referred someone who was asking him about places to invest at a decent return.

    Realtoe mentioned that in June, he has a chunk of money coming, he wants to talk to me about lending on a rehab.

    A “hard money lender” that I have become good friends with, initially charged me interest rate of 32% no points….was my lender of last resort, Couple month ago we agreed to 12% no points or fees. At least 5m available there.

    Ok I am getting carried away here with too many stories, but for new people I think it is important to see that it can be done, but like anyting else, it is difficult before it becomes easier. But keep building relationships, and letting people know what you do.

    It seemed incredibly difficult to get started getting private money, but once you build a bit of a reputation, and spend more time building relationships and finding out what people want and need, satisfying that need, rather than selling them it becomes easier and easier as the momentum builds.

    So I very much agree with Clay Huber and Glenn Schworm, there is a lot of private money available and it tends to come from unexpected sources, may times.

    • Awesome comment Dell.

      The more stories we have out there, but the more people can see that these things really “do” happen in the real world.

      Sounds like you have made the “domino effect” work very nicely for you. Provide good business and customer service to one person, and then all of a sudden they become a salesperson for you. That’s the name of the game!

  4. Clay,

    Very, very true lesson you just laid out here. The first private lender I found invested a sizable chunk that no regular 22 year old should have any business owning. Come to find out the person had done a few contracting tours in Afghanistan during their late teens and had saved all of their money ~ nearly $100k!

    Since that first lender I don’t underestimate anyone. If they don’t have the capital they are arms length from knowing someone who does.

    Be honest, layout all the options, and prepare a professional presentation that outlines the risk but showcases the returns and you are one step ahead of the game.

    Great article!


    • That’s great Glenn. At first that would be hard to believe, BUT then when you find out ‘how’ it was done, that makes total sense. A 22 year old who was a great saver who did some high risk work. Duh!

      I love your last point. Your presentation MUST contain the risks. You can’t just talk on and on and on about the rewards. EVERYTHING carries a risk, and I personally think people appreciate the fact when you just address it in your presentation. If you don’t, you always have the possibility of coming across like you are trying to hide it.

  5. Kevin Sapp on

    Absolutely correct to not judge a book by its cover. Millionaire next door concept too. Another over looked demographic IMHO is the young engineer. With good skills these “kids” can make 80k a year when graduating college at 21 or 22. Most are conservative, practical and modest. As an “old” man, 50 working with them, I see it every day. The hard part is presenting the material in such a way that the risks are understood to an extremely logical and detail oriented person.

    Keep the great articles coming!

    • Excellent point Kevin.

      And an even better point when it comes to “how to” present the information. Being a former “young engineer” out of school, if you would have had any chance on getting me to buy into your program, the presentation would have needed to be laid out in an a very logical and detail oriented way.

      Thanks for the comments and points!

  6. Matt Devincenzo on

    Clay great article!! I’m actually one of your strike out candidates, even more so because I did attend college and still have no debt since I lived at home and paid my way through school at the same time.

    I think that while your usual criteria are right on for investors, you can’t overlook the “generation with less life experience”. Since those are the people I’m usually around more frequently I try to talk about my investing as much as possible so that anyone I come in contact with that might be like myself will at least know I could be a resource.

    I’m seeing more of my age group being interested in providing for their own retirement, and while I haven’t found any that were quite where they need to be to enable a partnership yet, when they get there I hope to be the first person that they think of to help them start.

    Keep looking for those “less experienced” investors we’re out there.

    • That’s awesome Matt – congrats!

      Eeeek… the more I read these comments, the more and more I’m finding how off-base I was in my targeted demographic! Oh well, at least now it has been corrected!

      It’s funny you mention younger people being interested in providing for their own retirement. I just read an article while still laying in bed this morning about that very topic. Great point!

  7. Hi I recently read this article an It was great. Im a 23 year old with a 2 year experience in commercial real estate. Im currently working to do owner financing for a multifamily property in the charlotte,north carolina. Im currently working on ways to fund raise, do you know of any creative ways to raise funding ?.

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