How difficult is it to find private money in 2020?

[Frederick Parrott]

As I search it appears to be difficult to find private money in NorthEast Ohio. Does anyone have tips for how to locate these individuals?

[Michael Ealy]

Originally posted by @Shiloh Lundahl:

@Frederick Parrott do you have a solid track record? If not, I’d encourage you to use your own money until you have a solid track record. Money follows success. If you want to attract money, it will be much easier to do so by showing someone that you are a good investment based on your track record. 

I give the following example, not to brag but to illustrate. Last month we bough 710k worth of real estate with about 15k of our own money. 570k came from hard money lenders and 135k came from private money lender. I was able to raise that money in a couple of emails and phone calls from my network of hard money and private money lenders that I have build rapport with over a few years by showing them they I do what I say I’m going to do and they get paid back before I ever get paid. That’s how you attract private money lenders.

 Totally agree with Shiloh.

Once you establish a track record, private investors is easy to find. In networking here on BP, we lined up over $13 MILLION in private capital.

When I started and didn't have a track record yet, I learned how to acquire properties with little to $0 down. I also saved up some money by working three jobs. It was hard but I'm glad I used my own money instead of raising capital too early because I made a lot of mistakes - including losing everything. Good thing I never lost someone else's money.

When I lost everything, I re-started my real estate investing career by calling everyone I know and offered to help them invest in real estate. I got my real estate license and found deals for other people. I managed the construction and did the property management for them as well. I got paid fees and commissions and learned a lot. Once I developed a system and the process was repeatable, that's when I decided to tell others what I was doing.

Through networking and teaching others what I do, I was able to attract my first private lender.

Hope that helps.