How to raise private money (without looking desperate)

Question

We always see those RE influencers talking about using OPM (other people's money) to finance their properties when using the BRRRR method. But how would you even go about talking to someone about this? How do you find and ask people if they are wanting to invest with you without looking like you're begging for money? I'm sure there's a certain script you could follow, but you'd just come off as a salesman. I'm wondering how I could possibly make a connection with a private money lender without looking like some young guy after their money, especially if it is going to be my very first deal. I live in a wealthy area of Columbus and feel like I could be surrounded by potential private money, but have no idea how I could go about trying to raise it without looking like a desperate salesman trying to dig into their pockets.

Chris Seveney · Answer

@Mitchell Endicott

Actually it’s the opposite. You don’t have a script. Be yourself. When people ask what I do I tell them what I do and then ask them a question. Most people get wide eyed when hearing about real estate and want to know more. Tell them what you do and the deal your working on. In the deal you can say, yes we are in the process of reviewing this asset and figuring out funding because of the changes in the market.

I do not ask for money; I just tell people what we are doing and what we have going on

Remington Lyman · Answer

I think the key is finding a great deal and showing them how much money they could make

Kerry Noble Jr · Answer

Literally just talk to people and see if you can bring value. Try to insert your value and strengths into whatever theyre lacking. They may tell you theyre having an issue with deal flow.......boom then comes opportunity. Dont think salesman, think value add

Kenneth Garrett · Answer

@Mitchell Endicott

I’ve used a number of different private lenders. I have never asked for money. I go to REIA meetings real estate investing groups and other networking sessions and meet people. Listen carefully as people talk about things. Some talk about how they could never flip or be a landlord or wholesale. We’ll maybe there to network as well.

Attend meetings where they talk about self directed IRA’s or 401K’s. That is a meeting private lenders would attend or at least people interested in becoming private lenders. Be a good listener around you. You can talk about a deal your working on and looking for a money partner. With no experience you might want to partner on your first deal with an experienced investor to get your foot in the door and make valuable connections and how a project goes

together. Just some tips.

I like to create a 3-4 page prospectus on a deal and share it with investors. Leave the address off, but you can have the town in there. It describes the project, what I plan to do, rehab it and numbers, am I flipping it or renting it (brrrr) what interest rate i will pay, how long before the money is returned and the profit they can make. It should include as much about the project so they can analyze the investment. You can also talk about your team you put together and how the project will be successful. This is just a sampling of what I put in there.

Eliott Elias · Answer

Pitch the deal, don't ever ask for the money. "This is how much capital is required to execute this 20% COC return"

Let investors ask if they can invest

Nate Sanow · Answer

I haven’t yet raised actual private money just hard money… but the more deals I do, and the longer I’ve been around, honestly people have came to me with offers for private money. Often they want equity, which is not something I’m interested in giving up all the time. But my point is, while I haven’t taken it yet I’ve learned that it will come to you as you brand yourself and are consistent. To me, branding isn’t necessarily trying to be huge or famous, just consistent in this space.

How to raise private money (without looking desperate)

How to raise private money (without looking desperate)

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