How can I find private money? Ron LeGrand's way or?

Question

We need to find some private money. We have some free and clear property in CA and on the Colorado river. We want to look for private investors who'd be glad to get 4.5% on their money secured by a first trust deed. I've run an ad on Craigslist and in the past have gotten a loan that way, without points or costs or hassle, just documented our good credit and the equity in the property. But recently, we tried that again we're not getting responses from Craigslist. What other ways should we look for these kind of private individuals? I think I've heard Ron LeGrand say he teaches that. Has anyone bought his course and listened to it, and if so, does he really teach something useful other than asking my family members? I have great credit but don't have the time to get bank loans and I love getting private loans, but I haven't been getting responses to my Craigslist ad. I know there's tons of people out there earning 1% who'd love to get 4.5% secured by a first trust deed on a good property.

Scott Carson · Answer

If you are looking for private lenders, start networking!   Go to real estate clubs, join some meetup groups, send an email out to your warm market talking about your deals.  Post them to Facebook, Twitter, Biggerpockets, Pinterest, Linked IN, etc. Do a webinar on your deals and send it out to your database.  You'll be surprised at what shows up.

Raising private capital is all about communicating the deal and how its a benefit for your investor.  Share your due diligence.  Address the objectives on the front end.

Heck, go network at a local SD IRA meeting (Quest, NuView, IRA Services, etc).  Or start sending out postcards or letters to the local investors who own real estate inside of their SDIRA.

People want some sort of magic wand so that they can wish it and private money appears suddenly.  Raising private capital is a system and it takes time and work.

Ian Dyer · Answer

Thank you to all of you for this information. Some of you are telling me I can't get what I'm looking for. But, I can. The fact is that in the past, we have found this type of financing a number of times. There are definitely people out there who would be VERY happy to get 4.5% on their money right now, if they knew it was secured by a low loan to value first trust deed on an easily sellable home or fourplex in good condition, because they're earning 1% right now.  I was hoping to hear from people who've done it, who can share some of the best ways to find them, to save me from reinventing the wheel. I know I can find them but it seems like I often do things the hardest way, nose to the grindstone, and I was hoping for some advice to help me work a little smarter not harder. The ones we've found in the past have not been people who are active in the real estate investing industry. The suggestions Scott Carson made are helpful . I'll appreciate any other suggestions based on where others of you have found reasonable private financing in the past.

Darren Eady · Answer

My experience is that you will not get money anywhere close to the rates you would like to pay, except from a bank.  If you are trying to get money on vacant land, you won't get much from a bank, maybe 50% of value.  Most investors really want 12% on their money.  After lending $250m over the last six years and selling these notes to investors with a 12% return, we couldn't get much interest at any rate lower.  If you want private money, be prepared to pay much more than you are currently expecting.

Account Closed · Answer

I am in agreement with everyone here in that private money rates are most definitely in the 10% and up range and even then, some of these PM lenders are getting sophisticated enough to attach points.    Networking and creating credibility related to what you do is the key!

Westen Barnes · Answer

Still is there some where to look that private money lenders gather or network from ect.biggerpockets.  I would really like to go private than hardmoney but this aspect of REI is new to me but is the next step to learn and have to acquire.

Don Konipol · Answer

@Ian Dyer You may be able to find that one needle in a haystack that would be willing to lend at 4.5%, but I would think it would be someone totally unaware of the fact that he can invest through any number of HMLs and receive 8.5  to 16% depending on the risk level and type of collateral he's willing to consider. Further, he can go online to any one of an increasing number of crowd funding sites offering investment in both secured and unsecured loans at 6% to 36%, again depending on risk factors, etc.

I have found that the "competition" for the private loan seeker is not the interest rate paid by banks, its the return provided by other at risk investments, such as equities, bonds, derivatives, REITs, etc.  Most people these days don't consider keeping money in the bank as an investment, they consider it for its liquidity.

The idea that people will lend you money secured by real property because they are earning only 1% in the bank is partially true, but nowhere near as true as the "how to get a private loan" gurus would have you believe.

Bill S. · Answer

@Ian Dyer i think your offering rate is too low. People are expecting rates to go up and folks are thinking that they will be behind the curve at 4.5%. You should offer a time frame of a year or so or increase your rate. Just my opinion.

George Krajacic · Answer

Hi Ian,

People that are willing to lend their money to a complete stranger are usually sophisticated enough to know that they can get 6%, 9%, 10% or more by lending thru HMLs. If you have a property that you could get conventional loan on for 30 years I would sure take a time to get it because most private loans are for much shorter terms. I might have a source for so please call me.

George

How can I find private money? Ron LeGrand's way or?

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