Raising Private Money

[Erick Burgos]

Hi BP Community 

We are going to be presenting to a group of private investors and were looking to see if anyone would be willing to share  a presentation they may have put together. The calculators on BP are great if you are a flipper or if the investor will take an equity position. However, I dont see one where the investor puts money in and gets a fixed rate of return. 

[Allen Fletcher]

@Erick Burgos

If you are looking to borrow money from a private investor, you should show them the loan terms you are offering. If you are not offering equity you are asking for loans which means you should present the opportunity as a loan. Show them that the investment is like this:

Term: Length of time before the loan has to be paid in full

Amortization: The amount you pay each month is the same as if you were paying the loan off in 30 years

Interest rate: The annual return they will get over the life of the loan

Payment period: How often you are going to send them a check with a principal and interest payment

Collateral: What the lenders get to take if you do not pay your loan

Then you give an example of what they can expect to receive like the one below.

Principal: $50,000.00

Interest rate: 5%

Term: 5 years

Amortization: 30 Years

Payment period: Monthly, $268.41 for 60 months, balloon at 61 months of $45,991.15

Total interest: $12,210.32

Collateral: 123 Main Street, Small Town, Ohio

These loan terms are all negotiable and it is up to you work with your potential investors to tailor a deal that makes you both money.

Hope this gives you some ideas,

Allen Fletcher