How to Source Private Money???

Question

Hey all,

We are a wholesaler/flipper/whole-tailer out of Maitland, FL.

Recently, our marketing efforts have been paying off and we have 4 deals under contract in the past 5 weeks.

This is great but we have limited private money sources...

How do you all source private money for your deals?

Any tips or suggestions would be greatly appreciated!

Jaspreet Baveja · Answer

Thanks for the mention @Taylor L.. @Nicholas S Bond - It sounds like you already have access to SOME private money, but need more of it! It would be best to define what it is that you're willing to offer a PML. Room for negotiation, creative structures, deferred payments / points / fees on exit vs purchase (& many more things) separate a PML vs HML (more rigid terms and LTVs etc). I don't operate in FL right now, but, I would suggest looking through BP's list of PMLs in FL and also reaching out to a few brokers who can get you in touch with other PML / HMLs. I know that Ernesto Puig is one of those reputable, reliable, honest & a nationwide broker for funds! Congrats and Best of luck for the future!

Tucker Cummings · Answer

@Nicholas S Bond I've had a very similar issue and even posted it on BP recently on how to start the conversation and get the ball rolling (you can even look up my recent post about it).

Something very practical I did was go into Facebook groups for my target market and directly message the people that were making recent posts, the most active investors. I set a goal to message 5 people everyday, and add 10 people to my list of people to reach out to (1 in 2 people respond). I shared what I do now, what I want to do and asked how we could help each other out. In the span of about a month, I've built TONS of relationships I'm happy to say that I'm already working with someone to take down an 8 unit while using private money!

The message I send them goes something like this: "Hi Nicholas, reaching out because I saw that we're both in the NC REI group. I'm a wholesaler and BRRRR investor and am hoping to grow my network. I was wondering what kind of role you play in real estate and if there is any room for us to help each other out. Are you into wholesaling, flipping, buy and holds or something else? Looking forward to hearing from you."

They will likely not be the lender, but people know people.

Nicholas S Bond · Answer

@Tucker Cummings Dude thanks so much! That is very applicable; I'm going to start that right away!

Tucker Cummings · Answer

@Nicholas S Bond for sure, keep me posted on the success!

Joanne Eriaku · Answer

@Nicholas S Bond, to clarify, Private Money Lenders are your network- Friends, Family, dentist etc...I assume you are looking to go to those not in your private network. My newbie two cents which so far seem to be paying off are for you to structure the offer, help them see the opportunity you are presenting- define the Why, The how, Returns, Risks and Risk mitigation etc. I've put it all in a Business packet, feel free to PM for a peek at it. It just helps demystify a lot for the lender, helps build your credibility and its just good professionalism

Anthony Dadlani · Answer

@Nicholas S Bond

Seems like you have a track record.  Use that as your asset to attract private investors. Networking on BP, events and your personal friends and family is a good start.

Would love to have a conversation with you about your experiences and business. Please feel free to reach out to me and schedule a call. Best of luck in all your endeavors.

Taylor L. · Answer

Build relationships by networking with others. Think about the other investors you know well. Have you approached them and asked if they know any lenders or investors looking to place capital?

What about your offering and your business, is it appealing? Can an investor feel confident and comfortable in their investment with you?

My buddy @Jaspreet Baveja is on the other side, he's a private lender. I just talked with him yesterday about his process and criteria. If I may boil my takeaways down to two points, they would be: people and processes. Successful private investors like him are looking for trustworthy, experienced investors with good deals. He has processes for vetting borrowers and properties to determine if they fit his criteria.

Think about the way your ideal client thinks, what their priorities are, where they are, and who they might know!

Nicholas S Bond · Answer

@Taylor L. Very good information, appreciate the connection with Jaspreet.

@Jaspreet Baveja Thank you for the valuable insight with private lenders! You have given me much to think about and discuss with our team.

How to Source Private Money???

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