Financing Idea

How is this different from James' idea???

Seems fundamentally the same

The difference they are not putting money into an account. We will mak up a list of private lenders and they will decide if they want to invest their money or not. I read that some people might not want to invest in certain states and this will allow them to have control and they will make the profit, instead of a group of people. I think James post mentioned about a board making the decission. This is just pairing people uip

and not in any way trying to be confrontational but other than the account issue, its still fundamentally the same

You want to get DG members together to pool resources to fund DG deals. Correct???

Now other than not investing in any particular state, how is the point of making a profit different from James' idea???

Also the group of people making the decision, would that be DG members or outside parties making the decision???

I don't think Heather's idea is the same as the other one at all. She is not talking about pooling money at all I don't think.

She is trying to create a way to match up specific lenders with specific buyers

However, Heather, I am not sure this is necessary.

You guys are making this way too complicated. The other "fund" idea is not going to happen for the reasons that people have posted already. It is expensive to start because of SEC securities laws when you pool resources and operationally it is a problem. And Heather's idea is not necessary either. You have everything you need already available to you.

I am a private mortgage lender who visits this site on occasion to look for potential borrowers. I am sure there are others who do too. They will find deals to invest in if they are presented properly.

No offense intended, but the problem on this site is the borrowers tend to be very new and they do not have any idea how to present a deal. So I am sure alot of lenders just move on because they see nothing good.

Now, you can't necessarily do anything about the fact that you are new but you can learn to present more clearly and professionally. Quite honestly I don't prefer to lend to a new investor, they are the riskiest for me to lend to so you have an uphill battle; but you can present your deal in a way that shows you are serious, and know your stuff. If the deal is good and well researched, I'll fund it.

So what should you do? You already have a forum for financing. Here are some tips for posting there:
-#1 Make your subject line count. It should be clear, concise, and informative. It should state what you want, where the deal is located, and a bit more. It should not be vague.
Here are some bad subjects "Money needed". "Please help". "want 100% financing"
Here are some good subjects. "Hard Money loan needed for Chicago 2-Flat. 65% FMV", "Cash out Refi needed for 5 unit in NY. 50% LTV, great credit"
Those tell me whether I need to read the post and that my time won't be wasted.

#2- If this is your first deal, you must pitch a specific deal. No one is going to promise you funding upfront to get you going. They may fund a good deal and then when you have experience with them, you can seek a different arrangement.

#3- Don't be afraid to post details of a deal. A lender wants borrowers who have done their research and are willing to show their work. Give specifics, even addresses. Don't be paranoid that people are going to steal your deals. It just doesn't happen. Everyone is looking for their own deals and there are plenty to go around.

#4 Be clear, be complete. Show a lender that you have thought this through. Give comps, budget for all the appropriate costs, get contractor bids, research rents, etc. Be professional.

#5 Forget this utopian ideal of "keeping it all in the DG family". Broaden your reach, network outside your comfort zone, post on other sites. That is how you will reach lenders and learn more. Not be staying insulated in a small group. If you post a good deal and get no hits from this site, you MUST go elsewhere and post it too if you want to be funded.

I hope to see some good posts from people searching for funding around Chicago where I am.

Eric

THANK YOU!!! I often post on here concerning how to acquire a TRUE wholesale property and how to get it sold. If you don't know how to do this you are wasting your time. That is just how it is.
You stated in a polite manner just what needed to be said concerning new investors. Your 1 through 5 steps are right on. I hope every one reads your post about 5 times and really lets it soak in. They will be on the road to success if they read and learn. It may not be what they want to hear but if they take action and learn what they actually need to know it will be off to the races for them!
THANKS again Eric, you made the point in a way more effective way than I tried to do!!

Michael Mangham
MD Home Acquisitions LLC

Being a newbie and read most of the posts from James. I like Heathers idea, but do agree 100% with Eric.
And I would be a little concerned about borrowing money to new people that need some funding. I trust more people than not. And I would love to get funding, but I also know that if I have a solid deal, and prove the numbers and have some proof my deal will work, someone will want to help. In the sense that they may be willing if you work the deal with them. That gives them control, and you could bird dog the deal, assign it and prove you have the end buyer. What I am saying is that this whole investments with Dean, shows you can do it without money or credit. If you can't assign because of seasoning, or you can't do a double closing, then there are lots of ways to start making your own money. Once you get a couple deals done, others would be more willing to help you. But they need proof that they will get their money back. Some of the posts have talked about someone borrowed money to another and never saw or heard from them again. There was a post about that not that long ago.
I mentioned a deal that I wasn't sure of what to do, but knew it was a good deal. I did get some PM offers and didn't even ask because the deal was good. But I also took advice from "reality" and decided not to persue it because my end buyer wasn't that strong about it. Knowing that someone else did see that deal and offered some help made me feel good
But I wasn't going to be anxious and jump at something just because it seemed to work on paper. Now I do know that when I find something I might need help on, I can ask this person.
And I am totally alone doing this, broke too, and half the reason some aren't changing their lives, is because they have to just start moving on it... Advice is free and excellent on thses posts. Finding buyers and sellers is easier than you think. And I found a great Real estate agent.
It would be great if we could trust everyone, but unfortunately, there will be people that post for help, that won't care about who they take advantage of, and even contracts between those people, doesn't guarantee you would ever see them or your money again. If I can do it with all my set backs and issues, anyone can. Please believe me, it really works, and just keep working on everything everyday and it will fall into place. Establish repore and the help will be there.
Have a blessed day!
Sandi

Just came across this thread today and have read the posts a couple of times. We have a number of properties that are good deals when we run the numbers but so far the private money people I have looked into have all wanted to sell me something first.

That doesn't mean I can't find a hard-money lender to make these deals happen. It just means I have not found the right one yet.

Sure wish Eric was lending in the St. Louis/Metro East area for example.

Alice and Jim
HomeStar2020

thank you for your comments and suggestions
Regards
Tom

A good lender should have a great nose to smell a great deal when he/she sees one regardless of the investor's "experience"? Who is more experienced, the investor who's been investing for 2 years and made 3 deals worth $70,000 or one who's been investing for 1 year and made 2 deals worth $66,000?

A lender does not care the level of experience an investor has IF he can PRESENT a truly great deal. The question is about actually having the skill to acquire a great deal that a lender will look at. That my friend is what makes the difference. You can only gain that knowledge through experience! So if you are new, gain all the knowledge you can, then get out there and start making offers!

Good Luck!!
Michael Mangham
MD Home Acquisitions LLC

Thank you Eric for the 1-5 steps! This is exactly what I am preparing to peresent on my deals, so it is great to see that this is exactly what you as a lender are looking for.

As for #5, I appreciate that you mentioned this too, to confirm that the more places I list, the better the odds!

As for #3, I did get a form from Karen at the Success Academy (Non Circumvent Agreement), which just makes me feel a little safer when "showing" my specific details on a deal. (if anyone would like a copy, just pm me...), but good to know that stealing a deal usually never happens!

Thank you again for your post!

Jill

The key here is "when he sees one". My post was mostly to address the fact that the deals posted here are not being seen because they are not posted correctly so they can be seen.

However, to your point. In reality I have never seen a deal so good that a dumb investor can't screw it up. I have even been that dumb investor who turned winning deals into losing ones. So it isn't ALL about the deal.

As for your investor examples, they seem awfully similar to me. I would call them both fairly experienced. Remember, a lender doesn't care how much profit you make as long as he gets paid back.

Notice that I have always used the word experienced, rather than successful. I lost money on my first 2 fix and flips but I learned a lot. And that made me more prepared for my 3rd one. During the boom I saw plenty of people stumble into a big profit on their first deal and think they were geniuses but then they got their head handed to them because they hadn't really learned anything.

I guess what I am saying is that the good lender needs a nose for the good investor. I have learned to read the way a person posts a deal or talks or acts to see if they will be able to handle a project. Once I find a good investor he will then sniff out the good deals.

If I had to choose, I would lend to a good, experienced investor with an average deal before I'd lend to a brand new investor with a deal that looked great. All I want is the best chance to get my money back.

for the good information in this thread.

Steve and Veronica.

Eric3's write-up was great. I am not a PML, but have loan money for 12 plus years for a major bank. When lending, we didn't want to hear about how much experience you had. All we wanted to know is how the deal was structured. How do you expect to repay the loan, and how are our funds secured. Uh, yes, banks require some good credit history.

Eric3's write up is a good reminder of how everything is still the same when borrowing from a PML. I have cut and paste these points in my notes.

Ty