All Forum Posts by: David Becker

@Justin Leffew I sent you a PM. I recently looked into doing something very similar to this an I noticed we are both based in Ohio. I would love to discuss this further with you. 

PM me and we can chat. I am a local full time investor with a few connections. 

Thanks for the info Mr. Dietz. I appreciate the advice and that all sounds like a very good idea. I will try some of those ideas and see if I get any bites. I am currently talking to some commercial lenders for a portfolio loan but don't know if they are going to work out. I especially like your idea of just letting everyone know about what you do or are doing with your business. I will definitely try this. 

Hi everyone,

I have a few questions about raising private money. First off here is a little about my situation. I am a full time real estate investor and I currently have about $2.5M in real estate holdings.  My monthly gross income is right at $35k and going up by about $1k every 45 days or so as I buy new properties with cash. My taxes from a year ago don't show this income because it wasn't that high a year ago (this is part of the problem). I have a couple land contracts and a mortgage on my primary residence. The total of these land contracts/mortgages is about $780k. 

Ideally, what I would like to do is find a private individual that I can sit down and explain my situation to and show my business plan to. I would like to find someone that I can borrow $1M from. I would like to take this money and pay off all my other loans/obligations and basically consolidate all my loans into one. This would leave me roughly $220k that I would take and purchase income producing real estate outright (there would be no loan or mortgage on these properties). This would obviously increase my monthly income as well. 

The problem with the banks is they require two years worth of income on my taxes and as I mentioned, my previous years taxes weren't as high as this years and they average the income from real estate investments. My debt to income ratio is going to be to high I am afraid with the way the bank figures my income. I am growing every year but the bank regulations are what they are. 

I am fine with signing a personal guarantee and putting up roughly $2M worth of collateral. As well as I have a cosigner who would be willing to sign the note (although he doesn't make a lot he has an additional $2M worth of real estate).

So here are my questions:

1) I know there are some legal issues with trying to raise money from private individuals for real estate purposes and I don't want to do something that might end me up in trouble with the law. So how do I go about "soliciting" money from someone without stepping over the lines? What do I need to watch out for?

2) Secondly, for those of you out there who have experience raising money from private individuals how did you go about it? I am looking for ideas more than just those of you who might have been lucky enough to stumble into it by having a family member who has a ton of money. How do you actively seek out these sort of people?

3) Lastly, what sort of terms or rates did you end up paying? 

I appreciate in advance any and all replies!

David

Thanks Brie and Andrew for the information. That is extremely helpful to know that they should be able to do it free of charge. I would have half expected to pay for something like that. I have only spoken with my local community bank that I have my current mortgage through. Do you have any suggestions as to a bank that might be good to deal with or what type of bank I should look for?

Hello everyone. This is my first time posting on here but I am a big time fan and have been reading post everyday on here for a few years now. I have a question that I am facing and I figured why not put it out there and see what all the smart folks on here think. 

I want to thank you all in advance for taking the time to read my post and responding to it. So with that here is my situation:

I am a full time real estate investor who used to pay cash for all my properties. Last May I purchased a home (my personal residence) for $450k and ended up needing to borrow the money from the bank to close. The bank loaned me $420k on the home for 12 months at 4% interest only. I also put up a 290 acre farm that is right next to my personal residence that I own free and clear and is valued/appraised at $420k (so the bank has plenty of collateral and equity between the two properties). Additionally at the time when I received the loan I had approximately 26 SFR rental properties all paid for and owned outright. They are valued at $30k-50k each and rent for $825 on average. Again, I had zero other debt and liabilities. The reason they gave me only a 12 month loan was the bank didn't like the numbers and basically wanted to give it 12 months for my tax returns to look better since I am an active investor and always buying more houses. I have since purchased 3-4 other SFR (all paid for in cash and owned outright) and 2 apartment buildings on land contracts. The land contracts I owe $75k and $120k on respectively (that was the total starting balance. I've been paying on them for a few months so the principle is slightly less but for simplicity sake those are the balances). Both of the apartments more than cash flow. Right now my monthly gross income is about $25k. Since I only have a 12 month loan I have to go back to the bank in May of 2018 and see if they will approve the loan on my personal residence again, however I am afraid that with these other two land contracts they will not loan me the money again. I would like to see what my options are in either getting a portfolio loan or just exactly what my options are so that when May rolls around I am not facing a time crunch. By the way I will have approximately $350k income between now and May of 2018 so if absolutely needed I could take that and pay off the two land contracts to satisfy the bank (I could do this although it wouldn't be the most beneficial to me in the long run and I would like to avoid doing so). By the way, just so everyone knows I am based in Ohio just in case that might matter so how for state law being different or for different lending requirements.