Where did you get your financing from?

[Chris Johnson]

Hi all...This forum has been a great help for me. Though i actively don't post or participate, Im reading lot of your posts which is helping me to prepare for my first venture :)
Ok here is the question. Do you get your finance from Institutional lenders or private lenders. I see pros and cons with both types.
I dont think institutional lenders give loans for distressed properties. It takes long time to process.
On the other hand hard money lenders charge high interest rates. they ask for high down payment too i guess. but they are processed fast. btw do private lenders give loan for rehabbing?

[Gregory Childs]

We have our own fund that we manage and like many on this forum we treat it as a serious business. All businesses require some level of investment but not all businesses are sole proprietors. Many of us have established partnerships that work well year after year.

If it's your first deal and you have some cash then self finance. If cash is tight, but you have the expertise then find a money partner and offer to do the leg work for a split of the profits. You can put some skin in the game to show your serious.

My suggestion for your first deal would be to stay away from loans/hard money. Once you have a track record of a couple of deals the money will find you.. in the meantime build some "local" relationships in an area where you want to buy. Find a deal to partner on and then pitch it at a local meeting - if it's a good deal the experienced people in the room will recognise that... and if it's not a good deal they will tell you so - either way you win.

Know your strengths and play to them. Remember that you have to look at a lot of properties to find one that will work. But when you find it, because you've looked at so many, it will be obvious to you that it is a great deal. The key is control - once you control the property (contract/earnest money) if it is a great deal the money generally appears.

Greg