How do you approach a private lender?

[Tyler Rowley]

Let's assume you have a short list of potential private lenders whom you know personally, but you don't necessarily know if they are interested in private real estate lending. What are the best ways to approach them about lending?

[Shiloh Lundahl]

When it comes to raising private money you need to be careful that you don’t break any securities laws. In other words. If you don’t do it right and the deal goes bad, you can get sued or you can go to jail. Understand the difference between a debt investment and an equity investment. If you are trying to pool several investors together on a single deal and you are. It doing it according to securities law then that is where you tend to get in trouble the most. What we do to avoid that is we have someone give us a loan and we then create a promissory note and record a deed of trust on one of our properties. That is how we keep it clean.