I have been reading about attracting private money investors for real estate. I wanted to know if anyone has had success attracting private money. Also, I’m thinking of running an ad for private money and I wanted to know if my loan terms were attractive for potential investors.
$50,000 loan secured by a property in the suburbs of Cleveland. This property sold for $85,000 in 1999 and listed for $110,000 in 2008. It’s ready to move in and needs very little sweat equity. I will live in the property.
$50,000 for 24 Months. Interest only with 6 months pre-paid upfront. $50,000 Balloon payment due in 24 months. If I refinance the property in less than a year, you’re still guaranteed to get the 12% return for the year.
This is a better return than any bank, CD, money market account or stock return in this volatile market.
Be very careful about advertising for private lenders or you could get a call from the attorney general. It is easy to violate SEC regulations.
Your structure is good and private lenders will understand it’s safe regarding values and a good return of 12%.
Instead of marketing, pitching and selling to find private lenders take the approach that you will educate people. Tell your story, build a credibility kit highlighting your accomplishments and learn to tell people what you do in 15 - 30 seconds.
Go to where the money is at and network at meetups.
Build a list of 10 people you already know and be intentional in scheduling time to share your good news.
Learn everything about self directed IRA’s and teach folks how easy it is to roll over a 401k and invest with You.
When you have great deals and you have some experience you will eventually learn to attract money to yourself.
Private lenders need to see a track record. The returns sound great but you need to be able to prove that you can deliver them.
A property being “listed” for a certain amount in 2008 means nothing to an astute investor. You can “list” a property for any amount. What did it “sell” for? That is the real question.