Will Private Lenders lend to 1st timers ?

Question

Hello Forum ,

I am actively seeking PL to fund my deals in NYC , however , I have come across that if you have not done a deal you will not see the Funds. I am going to be truthful here , I feel that the only way is to be given a shot . I mean , if you have done your " Due Diligence " with the Property and the numbers make sense , why would a PL over look that and not see the " THE BIG PICTURE ".....the Profit ! For me, Finding Motivate sellers is the easy part , having the money to close the deal is the obstacle . With HML you need 20-30 DP and let alone it is very expensive . I am just trying to secure funding the PL way and my goal is to find 1 PL in 2014 to do business together and with profitability as well . Any feedback is welcome .

Thanks ,

Francisco Y.

NYC

Duncan Taylor · Answer

@Joe Fairless, that is exactly right and for anyone who has been in sales it is no surprise. People buy from people they like and trust. People invest in people they like and trust. Everything else is secondary.

Joe Fairless · Answer

@FRANCISCO YCAZA - I wrote a blog post on how to get your 1st deal funded from private lenders. Here you go: http://www.biggerpockets.com/blogs/4430/blog_posts/31793-the-psychology-of-raising-money

Paul Timmins · Answer

@FRANCISCO YCAZA Your local REIA's can be a great source for cash buyers and fellow wholesalers and private money. Paul

Darren Sager · Answer

You might meet one or two at the local BP meetup happening next week @FRANCISCO YCAZA Here's a link to the event: https://www.biggerpockets.com/forums/25/topics/111681-bp-meetup-in-new-york-city-for-entire-metropolitan-area

Francisco Ycaza · Answer

Hello Paul, Thank you for the quick reply and I will try to find one here NYC. Francisco

Duncan Taylor · Answer

@FRANCISCO YCAZA, a private lender is going to be investing in YOU first and the deal second. Lenders do not want to foreclose, especially in NY, it is a major pain and takes lots of time. They want to lend on terms, collect interest and the principal according to the terms of loan. They look to you, your ability, your experience and your credit to make sure they are not making a risky loan. You will need to establish a relationship and build up trust with a private lender before they are likely to take the plunge. You can try some hard money lenders, they charge higher rates but can be more focused on the deal.

Andy Collins · Answer

you can get a PL to do a deal for a first timer, IF you have good credit and put a lot of 'skin in the game' I'm assuming your planning on flipping, remember the lender is the one taking risk, will you do what you say, is the deal as good as you say it is, will there be unanticipated problems (yes, especially on your first rehab, but on most rehabs) etc etc, you have to give them a reason that you won't just walk away if problems come up,,if you have a lot of money in the deal, you would be less likely to walk away, if you have good credit, you don't want that messed up. Don't give up, but find out what a PL would want in a particular deal,,then work to get that cash/experience

Kris Haskins · Answer

hey Francisco, im very glad to c ur at least aware of private lenders as I didnt know about them till I was 6 yrs in. So, ur post is a bit concerning...... in my years of raising hundreds of thousands of dollars to do deals, I think the profit to a PL is 2ndary. I mean if we are talking about a true private Lender then it will be a person that has very little knowledge of real estate. My lenders 1st want to know they're safe. By safe I mean the person borrowing has intimate knowledge of rei and a track record. Since u dont hv experience, I always ask my borrowers "why don't u hv any money to invest in you" meaning why would u want a 3rd party to put up all the money and u out up nothing? To get some "air under ur wings" try plugging into a coach or mentor. I offer a full private lending presentation for my coaching clients that contains a pictures of before and after of over a dozen houses we've done. A newbie can then show a prospective lender the pics and say "this is what I WILL do" without claiming to have actually done it. The newbie can also show they are plugged into another investment co That has 10 years expiexpience. most PLs simply dont really care abiut the profit and moew care about the return of investment as opposed to return on investment. If u can show people the value u bring as opposed to seemingly asking for $, then they will invest w u. If this info helps you in any way please vote for this post... good luck and always keep in mind, as bad as u need the funding, there are people out there looking for vehicles to sink their money in to.....