Posted by Rolfe Mpls/StP on February 18, 2000 at 24:42:15:
Joe;
Thank you for your response. I’ve thought about attacting private investors for a long time. I know I have a hard time asking people for money, even if they are making a profit.
Since we currently work in the inner-city, one idea I have is to market the social aspect of investing in renewal. Investors will make money while promoting housing redevelopment. To me, that beats a donation to a nonprofit.
Feelin’ mean as heck and out lookin’ for… - Posted by Rolfe Mpls/StP
Posted by Rolfe Mpls/StP on February 17, 2000 at 01:31:01:
Cash. I’m very tired of going through the approval process only to be turned down. I want to raise capital to invest in renovation projects.
Our Family bussiness completed 10 rehab projects (sold 5, kept 5) in the first two years of operation. Used my own cash and credit, sweat equity, and a spritz of private money. I had hoped 10 successful projects would impress a lender, who’d see strength in our track record. Not so, yet.
I know I have most of what it takes to build this company into a player, to reach our goals. I want to build a REI machine! Yet I struggle trying to attract short term capital investers. I’ll pay 10% on their money. Their investment will used by my for-profit company to renovate distressed problem property in the core neighborhoods of Minneapolis.
We could , of course, continue to innefficiently dump $millions of goverment $ into housing renewal, creating strutures which cost 50% more than FMV. Or we can try my way, letting the marketplace renew the inner-city, with no subsidy at all.
I know my own attidudes and beliefs about money are a barriar for me to encounter.
Getting private investor/lenders to fund deals - Posted by JoeB(Atlanta)
Posted by JoeB(Atlanta) on February 17, 2000 at 07:28:52:
Hi Rolfe, we too got very frustrated w/getting loans from banks (although Ed Garcia taught a great course on getting bank money for REI, and will probably be speaking on it again at the upcoming Atlanta convention…we just haven’t followed his suggestions yet…sorry Ed).
Almost all of our money for deals, rehabs, etc. comes from private lenders. These are individuals who loan to us out of their IRA(tax deferred), 401k, CDs, etc., secured by a mortgage on the house.
We usually pay a higher interest rate than you–we pay 12-15% for a 1st mtg position, and 15-21% for a 2nd/3rd mtg (of course these are the folks w/smaller amts to lend; only $10k to $20k to lend).
We tell EVERYONE we know that we borrow from individuals at these rates, and ask if they know of anyone that may be interested. We also put this spiel on all our wholesale deals we fax out, and print/say it on all our advertising/networking at local REI group.
Due to all this ‘marketing’ for money, we know have quite a lot of no-questions-asked, instantly-available (albeit at a high interest rate) deal money.