The other day, I posted a question on the Forums: Private Money in FL-Where to find? After not receiving more than one answer, I just decided to go out and do some homework and here is what I found. (Probably more experienced investors in BP already knows this information, but I have just decided to share it anyway):

1. I read tons of articles, posts, offer from gurus, everything about private money. I also read an eBook that was recommended by the REI Club titled "Finding Private Money Lenders" by William Johnson. After all of that, here is my opinion:

2. Private money can be a good alternative when you approach people that you know and do know you. However, approaching people that you don't know is another story.

3. The SEC compliance issue is no joke, everyone seems to claim that they have the secret formula to approach possible private money lenders in an SEC compliance way. Federal Government regulations are very complex and even when we might think that we are doing it in the correct way, a federal inspector can see it in a different way, which does not excuse anyone from penalties and fines. Personally, I don't like and I don't want to play with fire.

3. Things like approaching people that are not in the RE business to teach them how to get better returns on their investments by using their IRAS, CD'S, Savings (the book explains a couple of other ones) and retirement income for Real Estate investing is very risky and to me, a no, no. You can even find the person that agrees to invest with you and feel comfortable at the time, but something can go wrong with the deal in the future, and you are still exposed that this personal files a claim against you. Even when you approach someone that had invested before in the Stock Market, we can not forget that the market is very regulated in terms of disclosures and regulations, and if anything adverse happen, the stock broker is a Licensed Securities Broker.

4. But, do not think that I'm seeing it on the negative way, just the opposite. To me is a matter of going outside on the field and network, network and network with fellow Real Estate Investors in the places where Real Estate investors used to network. After you meet them, is easy to develop a relationship with fellow investors since everyone is on the same page and you will be in a more safest position approaching someone that is one the same business as you are.

It takes a little bit more time to develop relationships, but to me that's the safest way to do it in the correct and compliance way.