Obtaining Private Money From Actual Private Lenders?!?!

[Camille Johnson]

I am a bit frustrated and hope this will be received well. This also may be somewhat lengthy as I just need to vent some.

I have a 15 yr background in account management/outside sales. My husband (a Chiropractor) and I started a renovation company in 2017 seeing an opportunity for us to start a business without much capital. With my sales/marketing background and his ability to run a team successfully we soon became busy. And good :)

After about a year or so we saw the opportunity to take our crews (we don't subcontract) and purchase distressed properties directly from homeowners not on the MLS. We use cash from individuals to purchase and offer double digit returns passively to our private lenders. We use a dedicated real estate attorney and all funds are kept in escrow for the duration of the job.

Again, we got busy! We started to get many houses in our pipeline and because we literally do this every single day - we are able to accurately determine renovating costs and have software to determine comps and profits to the penny. You would think this would be a no brainer for a PML to invest in. But it’s not the case! I’m so frustrated and don’t know where to turn. I do not want hard money loans and if I post for guidance that’s all that comes back.

Is there fear associated with private lending? We have a lock down/solid system in place with a renovation company in house.

How can we get the word out successfully so we can get more private lenders? Any tips or suggestions welcome.

Thanks.

[Jeff S.]

I can only imagine the number of anonymous solicitations you’ve received by now @Camille Johnson, from strangers happy to separate you from your money. Prepare to get your lunch eaten seeking money online like this.

BP has many very astute and honorable investors who are happy to share their knowledge -- all free of charge. Unfortunately, it also attracts its share of sophisticated scammers with fake websites, spoofed email addresses, and professional sounding names. There are the obvious telltale signs of a scam that have been written here ad nauseam: upfront money, Western Union, bad grammar, 6% interest, inappropriate license, private insurance, and on and on.

Similarly, Connected Investors, LinkedIn, Craigslist, Facebook, and others are cesspools of scammers. Do you know how to tell the difference between fake and legit?

You are flipping houses, Camille, not borrowing against large commercial properties, which could require dealing with a large out of town lender (and an airplane ticket I'll add). Don’t let your frustration suck you in.

Similarly, you don’t borrow money like this anonymously. Non-conventional money is best borrowed thru relationships. (And to respond to a comment you made in another post, it’s not “all about the deal,” it’s about the relationship. Deals come and go. The loan is made to you.). There are a ton of legitimate lenders out there and he safest way to develop a relationship is face-to-face. Local real estate clubs are the easiest way to find the greatest concentration of serious lenders.

This is a list of some real estate clubs near Chicago and Milwaukee from Meetup.com. With the amount of money floating around now, it would be hard to toss a rock into any of these and not hit a legitimate lender with whom you can have a real conversation. Lenders are climbing over each other now for experienced borrowers and you seem to fit the bill perfectly. Take a few to lunch. Visit a few of your properties. Bring a list of informed questions to ask and get to know one another.

You will lose many deals, but hold your lenders closely.  They will do the same.

Good luck, Camille.