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Private Lenders - How Do I Find Them?

liv42dy

New Contributor
Nov 6, 2007
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I'm looking for a private lender for my business, and I've heard there is a way to search courthouse records to find these individual private lenders that don't normally advertise they're lenders, like hard money lenders do. Has anyone done this before? What am I looking for when I search the courthouse records?

I haven't live in Salt Lake City very long, and I run a home-based business, which keeps me fairly isolated; so I don't know any of the investors in the area. But I'm ready to start introducing myself and forming lasting connections with these people.

To learn about me you can see my introduction http://www.thefastlanetomillions.com/showthread.php?t=4188

I look forward to seeing your ideas/solutions.
 

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Adam

New Contributor
Aug 12, 2007
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Minneapolis
You're looking for an angel investor.

Private lenders are "usually" looking for larger asset backed investments. Many people think of private lenders as the "old rich guy down the street." Private lenders are usually investment firms that build pools of funds by soliciting accredited individuals/investors. I don't beileve that this is what you want.

I would try to contact a small business consultant in your area. Many of the good ones have great connections when it comes to finding money for a good business idea.
 

liv42dy

New Contributor
Nov 6, 2007
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The angel investors I have spoken with do not do debt investments, just equity investments. And they expect 10x their initial investment on their return over a 4-6 year period.

I've also tried approaching VCs, business brokers, and capital investment firms (and, of course, traditional lending institutions). Is there a special place to look for small business consultants, or are they listed in the phone book?
 

liv42dy

New Contributor
Nov 6, 2007
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Chuck:

Thanks for the link. It's good information, but not quite what I'm looking for.

I would like to know how to find individual private investors that are not usually associated with angel networks or venture capitals. I've read that there is a way to find them through utilizing my local courthouse records, but the information did not specify what I should be looking for. Would you happen to know?
 

liv42dy

New Contributor
Nov 6, 2007
48
6
0
I've done a little more research into this...

The County Recorder keeps a record of all of the recorded Trust Deeds (not sure what this is called in other countries) on all real estate transactions. By looking at the Trust Deeds where the large investment firms in your area are listed as the Grantor, you can see who loaned them the money to make the deal happen (the Trustee or Beneficiary). Sometimes the Beneficiary is a bank, but sometimes it's an individual....a private lender.

Many County Recorders will allow you to access the recorded Trust Deeds online. Some charge a fee, some don't. After that, it's just a matter of sending a letter to the Beneficiaries you have qualified to see if they would be interested in funding your deal as well. But first, you have to identify the big time real estate investors in your area -- the ones buying 100 SFHs or mid-sized multi-units.

As for the specifics on how to pull up the Trust Deeds by the Grantor's name, I'm a little fuzzy. Unfortunately, my County Recorder charges a fee to access the records, so I haven't been able to complete my research. Any input any of you would like to add on the details would be great!
 

SteveO

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The angel investors I have spoken with do not do debt investments, just equity investments. And they expect 10x their initial investment on their return over a 4-6 year period.

Angel investors that I have talked to like to get an annualized return of 20-25% on a 3-6 year hold. They will take 8% annually until the sale or refinance of the project. They will probably want a stake in the equity as you have stated. This is what they use for security.

A hard money lender will be fairly expensive, require large payments and want points up front.
 

SteveO

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Private lenders will frequently advertise for business. You can search out local investment groups and ask the members. You can advertise yourself.
 

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