Tie up specific property first or raise money first?

[Scott W.]

Hi All-

Most deals I've done (all commercial property) have either been with my own $ or myself along with close business partners. I'm looking to expand my real estate investing and wanted to know; "Do you gain money commitment from investors 'before' you have a signed Letter of Intent on a specific property (ie: tell others what you are planning on doing in general terms with your real estate investing and get a commitment from them to be willing to put in $X in deals you do - whether it's 1 deal or 10 deals)... or do you agree with a Seller on LOI terms on a specific property and then go out and find the money needed to fund the specific deal?" I'm talking primarily through personal connections (not full syndication) but would like to know if there's any difference (other then the legalities, rules, paperwork filing, etc...) with how it would be handled between the two...

Thanks in advance... 

[Roy N.]

@Scott W.'s sandbox - but like you, it is probably on our horizon.

We keep periodic communications with our partners even when there is no explicit deal in the works - it lets them know we are continually searching for new deals and just how difficult it is to find one with legs in our current market.   When we find something that merits a closer look, we try sure up 50% or more of the financing (including our own) before we issue an LoI and start the dance.