What Comes First, the Money or the Deal?

As a private lender that talks with a lot of Real Estate Investors looking for capital for their deals, I get this question all the time... What Comes First, the Money or the Deal?

It seems like most newer real estate investors insist on chasing money without ever having any good deals in play.

A good deal is what comes first. Don’t raise capital and don’t look for money until you have a good deal in play because that is what will attract the money.

Raising private money or hard money for real estate deals is simpler than you think because it’s not just someone give you money or investing in an business idea. They are also investing in the property associated with that transaction and that is where their money is going. Their money is securely collateralized by doing it that way.

Having a good deal is always the number one thing. And keep in mind, worst case scenario, you have a good deal and you can’t line up the capital, you can always wholesale it, or partner with somebody.   Feel free to familiarize your self with capital lenders and potential funding or money sources but DON'T devote all your time to it.

If you’re having problems raising capital, my guess is it’s because you don’t have a good deal to begin with. So reevaluate it, and make sure you have a good deal and money will follow.