How Do I Find Investors/banks For This Deal?
My very wealth successful family friend is opening up on of his more profitable developments to some of his childhood friends to invest in. He’s the type of guy who’s doing this just so he can do business with his friends and help get them into the business. I’m lucky enough to get this opportunity but don’t have the cash to put down. I’m willing to take a very big percentage rate and/or give up some of the profit to get into this deal. How/ Where do I find investors or banks that will possibly invest with me? Does anyone know of anybody?
First of all what type of deal is it ? commercial development , residential development you give no information. How much will this oppurtunity cost you?
what type of partnership or joint venture is he proposing. Any bank or investor will ask you these
questions and many more before they even consider
your wants/ needs . In general you should find out what banks or investors in your area favor certain types of investments all lenders have a favorite type of project they lean towards
I haven’t signed on in a while but I would like some more information regarding your response to my post. Again I have a friend who is allowing me to invest in his residential development deal. I don’t have the liquidity to drop my own cash and I can’t refi my rentals quick enough to enter. I can invest up to 800K in 25K increments. Here is my question…
Are their lenders that will fund someone who will gain a percentage ownership in a development project?
I would obviously have a minority interest ownership in this project. There is 2 year estimated construction, sale, and profit allocation time period with the due diligence and research already documented. I can answer any and all questions about the project they might have. I just want to know what arenas I might go investigate to obtain funding and increase my investment.
If you have any suggestions about how I might get funding (i.e. hard money, banks etc.) and which would be the best route it would be greatly appreciated.
I realize that this post might be a little late, but if I am understanding your question, you are asking where you can borrow money to fund YOUR buyin for this opportunity, and I would have to say that I am not sure there is any bank that will fund that way. They will want to be able to put a lien against the deed on the land being developed, and not likely in a junior position.
If this project is basically a cash buy in from your friends perspective, then you need to find a different way to get the cash. If you can put the money in with 25k increments, do a signature loan for the first one, then get to work on refinancing your rentals.
It seems to me that in the month or so between your last postings, you should have been well on your way to having a refinance completed on your other properties. Should not have taken more than 30-45 days at most.
As for investors, it would be one thing if the project was yours... understand that in this deal YOU are the private investor for your well to do family friend. Anyone else putting their money up is going to want the returns you are expecting.
[ Edited by xlr8tor64 on Date 03/11/2008 ]
Hey --Just saw this question --its now three years --have you made investment and become a millioanire --??
If the projetcs so good --he will not ask friends to invest --he can get loan himself--
For you - i suggets sell few rentals outright --let the tenant or other investors buy your rentals and get all equity out --so you will have $200,000 to invest --quit your job and take one or two small projectf rom him to develope yourself under his guidance and as his partner --and make profit --then go to next project --if you can make 30% return on your investment then only its worth while doing --
hope you are still a member here --let me know what is the situation now
Place an ad in craigslist or the local paper if you are really serious.
You wont find any serious partners here, because this website isnt local. It makes a big difference, even if people are in same state, San Deigo or Freso is a big difference. Enough to scare away non locals.
thanks for your reply. tried craigs list multiple times without much luck mostly people doing the same thing replied. thought it worth a try. Im not looking for just local partners. Any other suggestions?[ Edited by sandl on Date 04/15/2009 ]
You can often find serious investors at a local real estate club. Or, form your own using Meetup.
Without a track record, you might have a problem getting anyone to invest with you. Be careful of the SEC rules regarding syndications.[ Edited by DooWop on Date 05/29/2009 ]
Sandl:
Get clarification on this as sell llc interests or real estate with a group of people is considered a "security".
Hey --Mr Bargain King of Florida is right --
Return is too low --you need to run some numbers --buy some books on how to analyze NOI, Cap rate and P& L for
apartments -- If Serious --Quit Job or take three months off-and work on it --PLENTY OF MONEY IS AVAILABLE FOR RIGHT PROJECT AND RIGHT RETURN.
Do you have credentials --have you owned or managed 30 units or 230 untis apartments ? do you know how to do rent comparables ? or how to Convert to Condominiums ?
California, Arizona and Texas has many apartments available-- at good price -- send me more info -sample example of what do you have available --
Many Institutional Investors like good delas-and come in as Equity Partner -- but only with experienced person -they want you to manage property until resold --
Yes- you can raise funds --upto One Million without security --UCCR -- or pay $10,000 for attorney and do a Private Placement Offering -- but you need a Business Plan --and prove your self-
I just got $1.7 million --from an overseas investor -for a specialized business-- I offered 15 % annual interest plus 100% return -in three years when I sell the business..Same Investor offered to invest $20 million more -- I may be buying some apartments -
I am alsoa Commercial Mortgage Broker--can help find Investors --if right deal -- [ Edited by champakshah on Date 10/11/2010 ]
Talk to the city/county on what the process is before buying. You also need to understand what difficulties (if any) you may encounter in attempting to subdivide. For example, if a property is zoned agriculture, sometimes it is a big expensive process to convert to residential single family dwellings.
I would consider hiring a local land use attorney to get additional information on what you can/cannot do if you still want to proceed after you talk to your city/county about what they say you can do on the site. A local attorney can tell you what issues you may have much better than we can.
Thank you for your advice Im going on wensday to sit and talk with the www.owner.I talked with a real estate and he gave me good advice(things to check into) I was also thinking land contract or contract for deed(both the same I think) and rehab house and keep for myself.
Thank You
Tim
It depends on the price you are paying , how big is the house, how far from nearest city and highway , availaboility of water and electricty --for future development --is it in growth path area ? --is there a demand for new houses ?
or a mixed use developemnet - apartments, strip cenetr and offices or even Senior Citizen homes --
As far as wetlands --make sure to talk to the state Environmental department and get delinieation of map- boundaries- and flood lines upto 500 years flood -- stay out - you can also donate wetlands to state parks department -- remaining 35 acres --do analysis of above mentioned issues -- DO NOT BUY--GET AN OPTION FOR THREE TO SIX MONTHS - AND DO some due deligence- or a Feasibility Study - then talk to one or two housing developers --and Sell the Option or do Equity sharing --- project --How much money are you investing ??
Hey --do you still have that money ??
Once again Mr King is right --
Do you have a job ? Colorado is also good for SFR investments --but do quick turning -- have a good attorney
and do short term loan to Rehabber / Investors at 3% for first two weeks and 4% per month for 90 days --with House as Collateral-
Quick closing and no credit check -will have Investors lined up at your house-- make sure to have good attorney and check value of house --ARV --do not go over 50% ARV --let the Invetsor put up money for rehab -- or Buy Mortgage ---at 10% yield[ Edited by champakshah on Date 10/11/2010 ]