Private Lending Campaign

[Shaniqua Dupree]

So I put a post on craigslist to find some seller financed homes. I got one offer for a mobile home which i was not interested in and another person asking me if i was looking for people to invest in a property with me. I said that was not my original reason for the post but I am interested and if (WHEN) i find something ill let him know.

So The last guy gave me an idea. If he is one that wouldn't mind going into a deal with me maybe others will be as well. So with that being said i would like to go on a Private lending campaign. Sending out hand written personal letters, adds on social media, newspaper, craigslist, handing out business cards and posting signs out.

Are there any restrictions on having to many people fund your deals at one time? ( I don't like the idea of sharing all the money with everyone anyway, just needed to as)

Do you think this is a good idea? If so why/whynot?

I plan to go to the more wealthy neighborhoods and send letter first and see how that goes. I want people to see me as professional so i need everything to be on point.

I think this would call for a website and a separate telephone number. Any suggestions on a website creator? Im going to look on bigger pockets market place because i know they help with things like that. Just wanted recommendation from BP members.

I never did a fix and flip or any other strategy before do please let me know if im out of line with this funding strategy and how i should/could go about it. I living in severn, md close to Baltimore and other areas.

thanks in advance.

[Jeff S.]

Originally posted by @Shaniqua Dupree:

... i was looking for people to invest in a property with me.

Are there any restrictions on having to many people fund your deals at one time?

You better believe there are restrictions, Shaniqua. First, you should be clear by what you mean by "invest in a property with me." Are you looking for debt or equity investors? That is, lenders to loan you money, or partners that own a piece of the deal with you. Borrowing is generally much easier than partnering but can be riskier.

Pooling money from several investors into one deal you all own a piece of will generally involve securities regulations. There are many restrictions on what you can offer, who can invest with you, as well as how or even if you can advertise. Compliance usually requires a registration with your state and the SEC and the cost for this can begin at $15k. Not for the faint of heart and certainly not for the inexperienced. Alternately, many investors are using some of the crowd funding sites to streamline the process and you might check these out.

The easiest way to borrow money is simply to ask. There are few restrictions here, so long again as you are not pooling money from more than one investor into one loan. You can normally ask any one person to loan you money for one deal. This person would be the sole beneficiary (i.e. lender) on a first position note. You can also ask another person to loan on another note for the same property, in second position, then third position, etc.

Some states, like CA, but not all of them, allow a note to be fractionalized as long as it's originated by a mortgage broker. If you needed say $100k, five people could loan you $20k each, with all their names as 20% beneficiaries on one first position note. There is generally no securities restriction here in CA, but I don't know the other states.

These are a few of top level options. Under no circumstances should you advertise for investors until you've spoken to a securities attorney, Shaniqua (and then only until you get some experience under your belt).

Good luck.