Newbie approaching private lenders

[Daniel Morgan]

Whats the best way for a newbie with no experience in REI to approach a private lender to partner up on deals? What makes a private lender want to even work you if your a newbie? wouldn't they want someone with at least some experience?

[Taylor Shields]

I would start looking for a lender that does 50/50 JV splits. They would probably take title to the property and then you would split profits 50/50 maybe even 40/60 in the lenders favor.

The fastest way to never find someone to do this is to say, "I'm a newbie and am looking for a 50/50 JV partner for my first deal".

You don't necessarily need to show a track record, you need to show competence. I would start by asking them as much about their business as possible. 

There are 3 points that every lender is going to want addressed and that you should ask about

1. Security

2. Return

3. Rate of return 

When talking to the lender I would first ask about these three things in their business then address them as I talk about my need for financing.

EX: I am looking to raise financing for fix and flips in (specific area), the capital would be secured by the real estate itself and the lender would take title. I'm looking for projects that would take 3 to 4 months and with a 50/50 profit split. Investor could reasonably expect a ____ percent return in that time. I know that my experience may be in question, if that is the case I would be open to any suggestions that would could help guarantee safety of capital. I have taken these steps (explain anything you have done or any colleagues that my be willing to check in on the projects)

 I would have a contractor lined up

Be prepared to explain how you evaluate a potential opportunity and what would qualify

If you take these steps and show that you are competent and hungry to learn you will find financing.