Hard Money Lenders?

[DeletedUser2]

If you have a strong track record, then a 12% Pref return is pretty good, I think your overselling it at a 70/30 return, if you did an equity split at that rate, I would push for a 8% Pref return, with a 70/30. if you go out with that rich of a term, AND you have as strong of a background as I think you do, then you will be giving up to much.

But, if your interested in closing the deal fast, and its your first, AND you will be open to doing other funds, then ya, Guess that means its ok to give up a bit more.

2nd time around you can reduce the investor bite

Just my 2 cents

Z

 

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[DeletedUser2]

maybe I'm undervaluing what we bring to the table.

there is alot of lazy money out there. 12% is pretty rich by itself.
it all depends on how you pitch.


how are your pitching skills?

go read Oren Klaff
Pitch Anything: An Innovative Method for Presenting, Persuading, and Winning the Deal: Oren Klaff: Amazon.com: Kindle Store

I met up with him in san diego. he has a great style.

My style is more about the story, and bite sized nuggets someone can walk away from the table and explain to thier friends, how smart they are...

hope that helps.

PS. drop me a line if you want some help with that.

Z

 

[Steve37]

I appreciate that feedback...thank you...

That split is something my partner and I completely disagree on. He's with you that we're giving up way too much. While we both agree on the 12% preferred (that really gets an investor's attention from what I've found), he thinks the split should be much more in our favor. Given your feedback, maybe I'm undervaluing what we bring to the table.

Very generous returns on 5 year money. I'd think with your track record you could get away with less. What security are you offering, if any? Would investors have any way to liquidate assets held by the fund if things completely fell over?

 

[Steve37]

The security would only be the assets in the fund. That said, I will likely have a couple hundred thousand of my own money in the fund, so I would have plenty of personal exposure as well. I imagine this will make my investors more comfortable, as I'm sharing in the risk.

Can't see you having any trouble raising capital with those terms. Look forward to seeing how it all plays out.

 

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[djs13]

JScott,

I'm reading your book and I absolutely love it. I'm going to be doing my first flip this winter.

I don't want to be overly nosy, but I'd love to know how you plan on expanding in addition to your flipping business? My ultimate goal is to purchase medium-large apartment complexes and to live off of the cash flow. But flipping SFHs (and the help from your book) are my strategy to get to that level.

 

[djs13]

Thank you! And best of luck...let me know if there's any questions I can answer along the way...

I will absolutely reach out if I run into trouble, but your writing style is extremely clear and concise. I haven't been confused yet.

It sounds like your plans are on a larger scale and more passive and that is very interesting. Since I'm in my early 20's I've got a long way to go. However, I am a forward thinker and I am always tinkering with my "plan."

I am working on my real estate license (should be completed next week) and I already have a position lined up with a commercial broker in my city. I feel like even if I can achieve moderate success flipping SFHs I can eventually quit my brokerage position. However, my goal isn't to run a flipping business forever - I would love to do the type of magnitude investments that SteveO is involved in. But it seems flipping SFHs is a great strategy to leverage one's savings when it is not necessarily high ($10k-$20k)

I guess what I am trying to say is, do you know of any investors who utilize your flipping strategies but also invest in large apartment complexes where they can establish more passive income? The majority of my REIA are either part-time flippers or part-time buy and hold investors (who mostly deal with very small deals). I would love to know if there is someone who has been successful with my future plan.

 

[_Cowboy]

This is GOLD!

THANKS YOU VERY MUCH @zen*******

Here is how I have found private investors.

I ask.
I ask alot.
I ask in a certain way so that they come out of the wood work. (more on that below)

first off, go where people who are either retired, or have money go.
1. golf
2. investor groups,
3. expensive hobbie, (horses, boats)


second off.

NO MUDDY PAWS!!!!

have you ever seen a puppy come in from the rain and is just super excited to see you and RUNS up to you with muddy paws and just jumps all over you?
you know the ones...

ya, dont be that muddy puppy, with muddy paws to your investor.

when you meet one. DONT just ask for money. DONT say, I HAVE BEEN LOOKING FOR AN INVESTOR JUST LIKE YOU, WANNA SEE MY DEAL? HEY WANNA? WANNA SEE IT RIGHT NOW?????

ya, that's a muddy paws approach. dont do that.

investors, look for deals, or opportunities. and if they are looking their ears are tuned to it. so you just have to bait the hook with curiosity.

I ask in a certain way......


What I do is when people ask em about what im doing, or working on, I usually position myself in 2 sentences.
1. shock and awe.

2. identify your perfect customer, and what value you bring to them

Doing this, i raised alot of money from private investors for years.

here is an example.

when I was buying non performing notes from banks, people would ask, What do you do.

I would say,

" I rob banks"
(shock and awe, alot of laughs too.)
then i would follow up with teh second part and say

" Raise money from investors, and buy properties at 25% on the dollar, and make my investor good money with a secured deal"
that's it.


the thing is, I could say that in a crowded room, and the 2 people who "thought" of themselves as investors, would then seek me out, and say, hey, can I get in on that action?

it was amazing. by baiting the hook with what value you bring to them, you get them to come forward. the shock and awe part created a heightened sense of curiosity, and caught their attention, so when I delivered the second part, it was received and heard. and most of the time it got the response of, can you elaborate on that? which is a great invitation to give a 30 second elevator pitch.

By doing that one simple thing, I found investors every where. at parties, at family reunions, at bars, at dinners.
it was amazing.

I also ask in a different way. I network.

People I know who dont have money I have no problem saying, hey, im looking for 60K for a good little deal, know any one who is looking to make better money than at a bank?

and then I shut up. if people know others, they will volunteer them or put you in touch. if they dont, they wont. period.

It also helps that I have built up a lot of trust in my circle of friends over the years.
so when I ask if someone has 300K or 1M I can usually find 2-4 people pretty quick.

basically its a constant farming thing. you plant seeds, spend time with people and just keep them informed. I had 1 guy who took almost 3 yrs before he said, ok, I have been watching you, and Im in now.

but really, I have found private investors are everywhere. the real key.... is being the person who is worth being invested in.

work to become that, and you will never have a shortage of investors handing you money..

Sorry for the long ramble,
hope that helps



Z

 

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[jon.a]

This is GOLD!

THANKS YOU VERY MUCH @zen*******

He asked me, I said no.

 

[MoneyDoc]

He asked me, I said no.

LOL. You never fail to deliver. Love your posts man.

 

[jon.a]

LOL. You never fail to deliver. Love your posts man.

It was true though.

 

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[MoneyDoc]

It was true though.

Doesn't matter, still laughed my butt off.

 

[NECST]

I'm not a salesman. So, all of the money I've gotten has been initiated by the other party.

Isn't everyone a salesman? And doesn't this mean you are just a really good salesman?

 

[DeletedUser394]

He asked me, I said no.

likewise, oddly enough.

 

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