All Forum Posts by: Taylor Shields
Taylor Shields has started 3 posts and replied 62 times.
Post: How to Approach Family/Friends for Private Money
- Real Estate Investor
- Lake Oswego, OR
- Posts 64
- Votes 29
Luanne,
Yes essentially that is what it is. For practicality sake I'll give a quick example, lets just say you get an owner finance deal at 2% interest only for the first 5 years on 100,000. Lets also say that the private money guy really likes his cash flow from that and doesn't really want to be cashed out. If you had a substitution of collateral clause in your contract when the agreement was made, you can transfer that loan to another property (with the the approval of the lending partner) keeping the financing in place. As long as the financing is in place and the lending partner likes it, I think you can transfer it as many times as you like.
I have not personally done this so I don't know about the LLC, this is about the extent of my understanding at this point. I have several colleges that are doing this quite successfully and It's really been interesting me lately.
Post: How to Approach Family/Friends for Private Money
- Real Estate Investor
- Lake Oswego, OR
- Posts 64
- Votes 29
There's a lot of good advice on this thread. I never approach family or friends with business opportunity's. I'd say the best approach is not to approach at all but to simply get others excited about what you are doing without presenting an opportunity to them at all. Get them asking questions and then say something like, "If you know anyone who may be looking to get involved let me know". If they are interested they most certainly will let you know. If you are dealing with a business relationship things can be a little more forward of course.
A great way to get cheap private money is using seller financing with a substitution of collateral clause so you can move the financing that is in place from deal to deal. There are several investors doing this very successfully in my area.
Also, I'm sure that you have heard of a "Credibility Kit". I would put together a nice leather portfolio with your resume, credit report, several deal case study's showing details of the transactions and what they could have made had they funded the deal, testimonials of any other lenders you have worked with, as well as home owners. You could also insert some content about cash flow, risk...ect