Tips & Sugg's On Securing Private Investors

cky profile photo

Okay.. Since an uncommon topic and a very useful one.. Any input, ideas, and suggestions from ALL regarding the recruitment of money (private investors)..

I'll start with some of my thoughts and past methods,

1) Run ads in newspaper
2) Hold investor dinners at a nice restaurant in banquet room and I do presentations using notebook computer and projector.
3) Have a success binder, with pictures, copies of offer, deed, checks, comps/appraisal for past deals.
4) Target professionals who want to earn good interest on their investments, i.e. doctors, any high income individual.
5) Offer an equity split of the profits, as most private money loans ARE short term 3mos to 2 years. Think of the lil equity share as what would be loan origination costs conventionally (about evens out) but this private money is sooo much more convienent, quicker, and no hassle compared to getting conventional loans.

Just what can YOU add to that list?

Chris

Comments(11)

  • classimg29th October, 2003

    Talk to your mortgage brokers they have connections to individuals willing to perform private investing.

    You can also try the Realtors but this may be a waste of time.

    How about the a local investment club. You will find your leads in this setting.

    Eric & Rosa
    [addsig]

  • cky29th October, 2003

    For the most part, I don't like nor work with Mortgage brokers, but for the usual reason, I have yet to find a decent one..

    Yes, I'm active in my local investing club.

    And talking to realtors in order to obtain private money is way off base.. But thanx for the input..

    The money I'm seeking is obviously NOT advertised in any way (which counts mortgage brokers out).. Will come from private individuals that want to obviously earn some decent profits on their money, safe and secured alternatives to the stocks and commodities market..

    Chris

  • InActive_Account29th October, 2003

    Contact some financial planners in your area. Sit down with them and tell them what you do and how secure the investments are. Invite them to the local real estate club you are involved with. Introduce the financial planner as an associate of “yours” to keep other vultures away. Once you get them comfortable with "creative" real estate investing, then they will be more open to approaching their clients and suggesting you meet with each other to explore common interests and how you may be able to help each other.

  • nebulousd29th October, 2003

    Has anyone secured private money for their sub to deal's?

    I hear private lenders always want to be in the first position, on a sub to, obviously they aren't.

    I could bring in a partner but before I go that route, are there private lenders who would go do such a thing.

    And no, I don't want to get a loan, I don't want my name or LLC personally guaranteeing any debts.

  • InActive_Account29th October, 2003

    Chris:

    My hat goes off to you. You're on the right track. It's just a matter of time. The licensed professionals are good candidates. Once you get one or two, they introduce you to more prospects than you need. What do you serve at the dinners? I'm hungry.

    You can sift through the recordings of mortgages (TD"s). The individuals who lend will be obvious. Those are the private money guys. When you see individuals with multiple entries, you've hit pay dirt.

  • DaveREI29th October, 2003

    cky,

    your list looks like a good starting point... I recommend you record your meeting so you can have a record of questions asked of you and such... I have been very successful with private investors....
    mine is full blown with power point presentation and a guest speaker or two...

  • JohnMerchant29th October, 2003

    "Contact some financial planners in your area. Sit down with them and tell them what you do and how secure the investments are. Invite them to the local real estate club you are involved with. Introduce the financial planner as an associate of “yours” to keep other vultures away. Once you get them comfortable with "creative" real estate investing, then they will be more open to approaching their clients and suggesting you meet with each other to explore common interests and how you may be able to help each other."

    I'm responding to Pherrijon's idea of utilizing financial planners.

    Thought my knowledge of this area* might help, .

    While it certainly sounds good, it would, in fact, be probably illegal for the typical FP to direct, assist or advise his clients to do so, with you, me, or anybody else except his own Broker/Dealer or Securities Firm.

    In the securities world, in which the FP works, he/she is formally connected, by law and contract, to one particular broker/dealer (i.e. Merrill Lynch, Smith Barney, etc.) & he/she cannot legally sell or help a client buy into ANY investment, of any kind, except an insurance co. annuity, if he/she is licensed to sell such, or a US Govt. Bond, and his/her doing so would be called "Selling Away"...which is a BIG NO NO! And for which BIG civil and criminal penalties can attach.

    "Financial Planner" is the modern, current "buzzword" for what used to be called Stock Broker, and these people are so closely controlled by their BD's that they have no freedom really to do what may be best for their clients/customers.

    Technically, under Fed & State law, they are Registerd Representatives of their firms, and have no true independence.

    * I did, at one time, have all the securities licenses, and managed a big BD's local securities office,so I was very familiar with this legal area & mine field.

    In fact, one of the licensees in my shop did exactly what law proscribes and prohibits, and sold a lot of his own junk to the firm's customers and got himself into a lot of legal trouble.

    He was lying to us at the BD, concealing this fact, and at my annual audits of all my Registered Reps, he'd lie to me and say No, he certainly wasn't selling anything else to our customers except the firm's approved securities.

  • JohnMerchant29th October, 2003

    "Contact some financial planners in your area. Sit down with them and tell them what you do and how secure the investments are. Invite them to the local real estate club you are involved with. Introduce the financial planner as an associate of “yours” to keep other vultures away. Once you get them comfortable with "creative" real estate investing, then they will be more open to approaching their clients and suggesting you meet with each other to explore common interests and how you may be able to help each other."

    I'm responding to Pherrijon's idea of utilizing financial planners.

    Thought my knowledge of this area* might help, .

    While it certainly sounds good, it would, in fact, be probably illegal for the typical FP to direct, assist or advise his clients to do so, with you, me, or anybody else except his own Broker/Dealer or Securities Firm.

    In the securities world, in which the FP works, he/she is formally connected, by law and contract, to one particular broker/dealer (i.e. Merrill Lynch, Smith Barney, etc.) & he/she cannot legally sell or help a client buy into ANY investment, of any kind, except an insurance co. annuity, if he/she is licensed to sell such, or a US Govt. Bond, and his/her doing so would be called "Selling Away"...which is a BIG NO NO! And for which BIG civil and criminal penalties can attach.

    "Financial Planner" is the modern, current "buzzword" for what used to be called Stock Broker, and these people are so closely controlled by their BD's that they have no freedom really to do what may be best for their clients/customers.

    Technically, under Fed & State law, they are Registerd Representatives of their firms, and have no true independence.

    * I did, at one time, have all the securities licenses, and managed a big BD's local securities office,so I was very familiar with this legal area & mine field.

    In fact, one of the licensees in my shop did exactly what law proscribes and prohibits, and sold a lot of his own junk to the firm's customers and got himself into a lot of legal trouble.

    He was lying to us at the BD, concealing this fact, and at my annual audits of all my Registered Reps, he'd lie to me and say No, he certainly wasn't selling anything else to our customers except the firm's approved securities.

  • JohnMerchant29th October, 2003

    In the securities world, in which the FP works, he/she is formally connected, by law and contract, to one particular broker/dealer (i.e. Merrill Lynch, Smith Barney, etc.) & he/she cannot legally sell or help a client buy into ANY investment, of any kind, except an insurance co. annuity, if he/she is licensed to sell such, or a US Govt. Bond, and his/her doing so would be called "Selling Away"...which is a BIG NO NO! And for which BIG civil and criminal penalties can attach.

    Oops! I meant to say the FP cannot sell any investment except his own BD's approved list of investments, such as Mutual funds, Variable annuities, REIT shares, listed stocks & bonds, etc...if he/she has the necessary licenses, he/she can sell any ot his/her own firm's security offerings...just precluded from selling or recommending anybody else's investments.

  • cky29th October, 2003

    Neb,

    "Has anyone secured private money for their sub to deal's?"

    You should NOT need private nor conventional money on sub-2s.. On almost any sub-2 deal it is a PFL or vacant, or 2nd mortgage payment/house for the owner thus they are motivated to get rid of their problem. This means the owner will take payments for there equity. It's that simple. On many PFL's you will need a few thousand dollars on ****Must Reach Senior Investor status before posting URL's*** bring current the past due back payments on a mortgage.

    Now, let me finish reading everyone elses posts and get some brainstorming going..

    Chris

  • cky29th October, 2003

    Sammy,

    Wonderful tip, though your probably familiar that there is NOT MANY if any (depending on size of your area) private investors. As well, I'm more focused on finding individuals who've never invested in RE from the money perspective and have never even thought of the possibility. So I need to find these potentional candidates, then sell them on the profit and security of this kind of investment, and close on some more properties but of course..

    Chris

    -----
    "My hat goes off to you. You're on the right track. It's just a matter of time. The licensed professionals are good candidates. Once you get one or two, they introduce you to more prospects than you need. What do you serve at the dinners? I'm hungry.

    You can sift through the recordings of mortgages (TD"s). The individuals who lend will be obvious. Those are the private money guys. When you see individuals with multiple entries, you've hit pay dirt."

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