I'm looking for any tips to locate a private investor. I would like to be able to offer cash for my fixer offers. Any info would be great to get started.
I can think of 3 ways off the top of my head:
1. Go to your local REI club and get up and tell eveyrone you're looking for private money: you'll do the work, they'll provide the cash.
2. Put an ad in the paper offering a good return on cash, secured by real estate.
3. Network: talk to everyone you know about what you're doing and how you can help their money make money for themselves.
Andy, #2 is a clear violation of securities laws, and is bad advice. It must be done via word of mouth i.e. no public soliciation.
After you strike up business relationships and discussions, you can start to mention it, but this advertising 10% secured by real estate can land you in jail if the deal goes bad and the investor wants to pursue litigation
I am unclear of the securites laws other than Respa that are involved? I thought that applied only to amounts over 1 million?
I am not an expert on this, I have listened to Alan Cowgill and Ullmer on the subject. One holds lunches, explains what he needs the money for and tells the prospective lenders what they may reasonably expect to receive in regards to interest i.e. no payments required 12% if payments are required through the process then they get 10%.
My personal experience with people who have found out what I do and have contacted me about loaning me money to fund deals and give them a return..
I am always reading and would love to know more about it. I have "heard" that if you advertise and expect to go over a certain dollar figure that a securities license is required (also easy to obtain).
Stockpro99:
I feel you are right. The one that usually takes the hit is the lender for violating the 'usury' laws. I have a friend who was a real-estate investor and then he cashed out and had over $3m in cash. He started lending money out to rehabbers for their deals. I dont know the exact details, but he is now in litigation because he is being accussed of being a 'loan shark' and violating the usury laws..
If you look in the local papers especially on weekends, there are tons of ads in there for people wanting to borrow and loan money...... This happens all of the time....
I think the person who has the most liability is the private lender who is not a real-estate broker. They consider this 'usary'. The key is to find one person that you can build a good working relationship with...
Maybe John Locke or Lufos can lend some insight on this subject....
Again, this is not my expertise. I am just a 'flipper clown'.
another suggestion : talk to a mortgage broker. they charge a fee for finding the money but if you think you may have a large enough profit, his fee may be equivelent to pennies.
I disagree with davehays. Advertisements are allowed to solicit private investors.
You can not use the word "guarantee" in your advertising.
Just make sure you talk to an attorney and get all the necessary paperwork together before using a private investor.
I am currently in compliance with my State and Federal laws regarding private investors for real estate.
Check with your attorney before using your investors.
I have been using private investors for over 10 years and have always been in compliance with the laws.
[ Edited by savvy_investor on Date 02/19/2005 ]
Check with your local mortgage brokers. Many loan officers with experience should be able to refer you to one or more "hard money lenders" that they either know or have directly worked with before. Loan officers are a major referral source for these private investors. Good Luck!
Try asking your life insurance saleman or any life
insurance saleman you may know. Many people
have whole life cash value polices they would like to make extra money on these funds . Do you have an accountant or know of a good reputable one he may have a client with funds he would like to use to do some real esate investing with but may not have the time or the knowledge for this. Form an LLc a good accountant can help you this is how I started seven years ago. Hope this was a start.
I have found a number of Private lenders just simply doing a google search. Private lenders does not necessarily mean that they are private people, there are actual companies that private people set up to take care of these type of loans. Just search google...
I can think of 3 ways off the top of my head:
1. Go to your local REI club and get up and tell eveyrone you're looking for private money: you'll do the work, they'll provide the cash.
2. Put an ad in the paper offering a good return on cash, secured by real estate.
3. Network: talk to everyone you know about what you're doing and how you can help their money make money for themselves.
Andy
Andy, #2 is a clear violation of securities laws, and is bad advice. It must be done via word of mouth i.e. no public soliciation.
After you strike up business relationships and discussions, you can start to mention it, but this advertising 10% secured by real estate can land you in jail if the deal goes bad and the investor wants to pursue litigation
Does anyone else have an opinion on this?
Thanks,
bnitsuj
HI Dave,
I am unclear of the securites laws other than Respa that are involved? I thought that applied only to amounts over 1 million?
I am not an expert on this, I have listened to Alan Cowgill and Ullmer on the subject. One holds lunches, explains what he needs the money for and tells the prospective lenders what they may reasonably expect to receive in regards to interest i.e. no payments required 12% if payments are required through the process then they get 10%.
My personal experience with people who have found out what I do and have contacted me about loaning me money to fund deals and give them a return..
I am always reading and would love to know more about it. I have "heard" that if you advertise and expect to go over a certain dollar figure that a securities license is required (also easy to obtain).
Let me know where I can educate myself on this
Randall
[addsig]
Stockpro99:
I feel you are right. The one that usually takes the hit is the lender for violating the 'usury' laws. I have a friend who was a real-estate investor and then he cashed out and had over $3m in cash. He started lending money out to rehabbers for their deals. I dont know the exact details, but he is now in litigation because he is being accussed of being a 'loan shark' and violating the usury laws..
If you look in the local papers especially on weekends, there are tons of ads in there for people wanting to borrow and loan money...... This happens all of the time....
I think the person who has the most liability is the private lender who is not a real-estate broker. They consider this 'usary'. The key is to find one person that you can build a good working relationship with...
Maybe John Locke or Lufos can lend some insight on this subject....
Again, this is not my expertise. I am just a 'flipper clown'.
Best Regards,
Jeff Adam
[addsig]
another suggestion : talk to a mortgage broker. they charge a fee for finding the money but if you think you may have a large enough profit, his fee may be equivelent to pennies.
I disagree with davehays. Advertisements are allowed to solicit private investors.
You can not use the word "guarantee" in your advertising.
Just make sure you talk to an attorney and get all the necessary paperwork together before using a private investor.
I am currently in compliance with my State and Federal laws regarding private investors for real estate.
Check with your attorney before using your investors.
I have been using private investors for over 10 years and have always been in compliance with the laws.
[ Edited by savvy_investor on Date 02/19/2005 ]
bnitsuj,
Then again, I guess you could do the simple thing and call me at
[ Edited by jfmlv1950 on Date 03/02/2005 ]
Check with your local mortgage brokers. Many loan officers with experience should be able to refer you to one or more "hard money lenders" that they either know or have directly worked with before. Loan officers are a major referral source for these private investors. Good Luck!
Try asking your life insurance saleman or any life
insurance saleman you may know. Many people
have whole life cash value polices they would like to make extra money on these funds . Do you have an accountant or know of a good reputable one he may have a client with funds he would like to use to do some real esate investing with but may not have the time or the knowledge for this. Form an LLc a good accountant can help you this is how I started seven years ago. Hope this was a start.
I have found a number of Private lenders just simply doing a google search. Private lenders does not necessarily mean that they are private people, there are actual companies that private people set up to take care of these type of loans. Just search google...