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JeffMurphy
8 Posts
Member Since: 09/09/2007
Augusta, GA
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Posted: 18:44 on 12-14-2007
i' ve been in search of hard money lenders, private investors. Anyone in who will lend based on the equity in the property.....I' ve talked to attorneys, mortgage brokers, other real estate investors. You name it, and I have tried it....At least that' s the way it feels to me.
The thing is, I am new to real estate, and my credit is not in the best shape.....However, I know i can do this business. I know what it takes to spot good deals, as well as estimate repairs. I also know how to get cashed out in this slow market....I am currently partnered with one of the top guys in my city on a deal now......He' s a great guy, who is helping me along the way if I need help.
I know you probably may be wondering why not ask him to be a private lender. It' s that he' s helped so much already. I hate to ask him for this, and It' s also something I wanted to do on my own. He had to go through this when he was young, so why shouldn' t I have to.
So here is my question for you savy investors or new investors, who have aquired private funds or hard money with little experience or credit, HOW DID YOU DO THIS...I' ve been trying for a good year and half, and haven' t had any luck....
Any help would be greatly appreciated (John, sorry so long)....
frustrated newbie, Jeff 
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linlin
780 Posts
Member Since: 09/25/2004
Haverhill, FL
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Posted: 21:17 on 12-14-2007
Your reasons for not asking the guy you know are weak and make no sense. If you are not willing to ask someone you know and who knows you and your capabilities (based on what you say) to help why should a total stranger.
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cjmazur
4284 Posts
Member Since: 07/23/2003
Cupertino, CA
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Posted: 21:50 on 12-14-2007
have you asked why they are tunring you down?
A friend was pitching a commerciial condo deal at a value of $700/ft (they had a residential component). But non-one the money people bought this.
ARe you pitching a fantasy?
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JeffMurphy
8 Posts
Member Since: 09/09/2007
Augusta, GA
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Posted: 11:56 on 12-16-2007
Cj, I understand what you are saying, but I' m not pitching a fantasy. I not a seasoned investor, nor am I totally clueless about this business. i know what a deal is, as far as residentials go. I just need money lined up to play this game as hard as I would like.
Lin I was thinking about what you said, and i kind of understand what you are talking about (why should a stranger lend). Maybe it' s me, but he has worked his butt off to get his money lined up to do deal after deal. I just wanted to go through the same growing pains as everyone else. It' s that reason I feel as though he' s one of the top guys here, and now he is on his way to do some really big things!
The reason lenders won' t lend is because my credit is not the best in the world, and i know there are Gurus out there who say credit is not important to HMLs. However, it just haven' t worked that way for me.
[ Edited by JeffMurphy on Date 12/16/2007 ]
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ICGPROPERTIES
96 Posts
Member Since: 12/05/2007
Cary, IL
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Posted: 00:51 on 12-17-2007
a hard money lender will lend based off the deal and not the credit. If you have been turned down by hard money, then your deals did not make sense, it's as simple as that.
Do you produce detailed proposals? If you don't, do it now and bring it to your guy. ask him "his opinion" on the deal. If your deal is good and your proposal makes sense-he will help you find the money.
[ Edited by ICGPROPERTIES on Date 12/17/2007 ]
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JeffMurphy
8 Posts
Member Since: 09/09/2007
Augusta, GA
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Posted: 09:38 on 12-21-2007
Thanks guys!
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boardwalk1201
46 Posts
Member Since: 12/01/2007
Point Pleasant Beach, NJ
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Posted: 00:31 on 03-10-2008
Jeff
When you "pitch for a private lender" you are actually giving your friends, family the opportunity to be involved in an investment that they would not normally be invited into. How many investors have called you because they want to include you in their newest idea! Well you are calling people to include them in your next idea, will they be angry or flattered? Depends also what you are offering for a return. You are asking them to be the bank, what does the bank expect, for security as well as return... make it up as you go
Good luck
Mike
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jrichman65
31 Posts
Member Since: 03/18/2008
Matthews, NC
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Posted: 06:57 on 03-19-2008
As stated earlier, if you are not at least at a minimum of 70% ARV and most hard money Lenders are at 65%, the deal does not work and you shouldn't do it.
Regarding friends and family, first, they have to respect you in what you are doing and then you have to have a good proposal as to why they should invest with you. If it makes sense, they will do it or at least ask more questions which means that they are interested.
Most friends and family don't know where to go to earn between 12-15%. Show them how, if it's a deal worth pursuing
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stdavid
130 Posts
Member Since: 09/29/2005
Billings, MT
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Posted: 09:17 on 05-21-2008
You're going to need at least one of these two things: Good credit or CASH. There's really no way around it. If you have neither, spend the next couple of years getting one or the other or both. Why, after a year and a half have you not improved your credit? A hard money lender wants you to bring cash to the deal. A bank wants you to bring good credit to the deal. They usually want cash too but there are ways around this if you have good credit.
Here's how I got started. I borrowed $2300 from my parents and bought a trashed mobile home for $1000 and fixed it up with the rest of the money. I sold it for $5000 and used that for a downpayment on a house for my primary residence. It was a fixer so I got a construction loan at a bank that let me pay myself labor and also used that for the money down. After a year of seasoning, I got a HELOC to use to invest in other properties. During that time I also built up my limits on my credit cards to about $100,000. Then I found a fixer, bought it with 30% down from my HELOC and used a hard money lender. I fixed it up with my credit cards and sold for a profit.
This all took a good 3 years for me to get into investing. It takes perserverance, cash, and good credit. So fix your credit or find a rich relative who is willing to risk their hard earned cash on a rookie or both.
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