Approaching family members for private money

[Amber Butler]

Hello all. Newbie here.

I have a question regarding approaching family members about private money. I am originally from California, but looking to do business in Philadelphia. Well I am going back to California very soon to discuss the possibility of some family members becoming private money lenders. I have most of my presentation together, but I am wanting to be fully prepared with any questions they might ask. Currently, these are the topics my presentation consists of:

I go over my personal background as well as the background of my husband and our coach. (Whom is Peter Giardini)

The current market in Philadelphia where we will be rehabbing

A little about how we analyze whether the property is a deal or not

How we pre-screen contractors and select them

The liability and insurance we will be purchasing for the property

Our marketing strategy

Our exit strategy

Terms and Conditions of the loan including interest rates

And pictures of potential properties we will be rehabbing (including the example scope of work, our deal analyzer, and repair cost estimation if wanted for additional information)

I am wondering if there is anything I have left out. Considering I have never approached someone regarding funding for private money what type of typical questions or objections do individuals have that I have not addressed in my presentation? One thing I am wondering about is the fact that the lender will not be within the same city where I will be performing the rehab. How will I be able to overcome this objection? Also what will be the best way to present to family members that will get them to say yes?

[Amber Butler]

Thanks Lisa Cunningham I would love that information

[Tyler Byrnes]

Amber, have you thought about partnering up with someone since this is your first project. It limits the risk and gives you valuable experience.

I would not recommend using family money until you have established a track record of successful flips. It is not worth the risk. Family relationships are worth more than money. Most of the successful flippers on this forum started out with no access to family or private money. It can be done, but it forces you to really scrutinize a property even harder, knowing the holding and borrowing costs will add up fast.

You have already shown good discipline by accumulating some money of your own, so I would keep that up and try to find the best financing option outside of family.

Best of luck!

T