Talking to potential private lenders

[Blake Dowe]

Hey everyone,

I'm very new to REI and spend a good amount of time reading and learning as I am still a ways away from doing my first deal (A multi-unit owner occupied buy and hold). I'm finishing up college in spring 2016 and plan on making an investment shortly after, but my summer job for the past few years (and currently) is at a yacht club where I basically help people with their boats and make small talk. Over the years I have built some relationships here and am looking to ask some of the members of the yacht club to invest with me. I am 20 years old and most of the members are above 40, I have good standing with them but feel a little uncomfortable breaking the ice in terms of talking money. How should I approach them? What kinds of questions should I ask? Lastly, what is the process of paying back their investment with interest and how does that payment process work?

Thanks!

[Jeff Joachim]

@Blake Dowe You have to find someone that subscribes to the same investing ideology that you have. I would talk to the successful folks at the yacht club that you have a good rapport with and find out which ones have made their money in real estate. Ask them how they found success in real estate and get specifics on their investment strategy. 

Let's say one of the folks from the yacht club tells you they only buy houses that they can pick up for 65% ARV on the west side of town. Ask them, if you were to find a property like that would they be willing to partner with you on the deal. That is the quick way of doing it. However, if you have time, I'd recommend going the route that I went if possible.

I found my business partner because I adopted them as a mentor. They had a high net  worth and owned 200+ properties at the time.  I told them that I wanted to learn everything I could from them. I would buy them lunch, ask what books they read, how they built their fortune and volunteer to help out for free on any upcoming projects. Meanwhile, I was building credibility with them by showing a strong work ethic and that I grasped the concepts they were teaching me. When I happened to mention a good deal that I came across, they offered to partner with me...and the rest is history. 

A few sandwiches, reading a few recommended books,  and a genuine interest in investing led me to developing a great friendship, mentor and business partner. 

I'll be rooting for you here in Orlando, Fl Blake! Keep us posted on your progress!