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.
Hope this helps,