Private Money Partnering

Funding Fundamentals – The Money

Chapter E

Finding Partners
Finding Money – Traditional Sources
Finding Money – Nontraditional Sources

Finding Partners

Where are you going to find joint venture partners? And if you have a good deal, where are you going to find the money? Unless the blue bird of happiness is going to fly overhead, and make a deposit in your bank, you need to think about what businesses do – they advertise. Where is the money going to come from? For all you know, it might be with the folks next door.

You need to tell the world what you’re doing, what you’re interested in. The world is not going to know unless you open your mouth, and you take the risk, and you share with somebody exactly you want. You need to network with other people. If you’re successful or if you look successful, successful people want to work with you. Many people think that real estate is a great investment, but they don't know how to get into it. They want it, but just don't know how to do it. You could become involved with other money people, or other deal people, or both, by becoming knowledgeable about doing deals in real estate and letting the world know what you do.

Finding Money – Traditional Sources

Neither a borrower nor a lender be? Who said that? Actually it
was Shakespeare. Polonius was giving advice to his young son
Laetes, which might be good advice from an old man to his son starting out in the world a few centuries ago. However, it’s
not going to get you many deals.

Let’s talk a little bit about where you can possibly get money. Some sources wouldn't require any kind of a venture agreement, and others would. If you put your thinking caps on, and started with yourself, just yourself and your immediate circle, who would you ask first?

The Bank of Family

Start with Mom, I did. Basically, moms believe in you. And with the bank of family, there’s no credit application. Someone told me once that the first code of finance is BYFAF, or “Beg Your Friends And Family”, and their family of friends.

Your Spouse

Did any of you marry money? Perhaps your spouse is not at all interest in real estate, but is interest in making money, so you could put together a formal proposal to tap those assets.

Your Personal Assets

Your personal assets, of course, could be liquidated to create cash for part of a venture. Perhaps jewelry or the cash value on insurance policies. Or C.D.’s, or money market funds. Start with what you already have, to see what you can get, to obtain what you want.

The Bank

There’s nothing really wrong with going to the bank, especially if you can work yourself into the position of obtaining a line of credit so you can tap funds instantly at a relatively low interest rate, and you can deal with the paperwork and all the credit requirements. What’s wrong with bank money as one component of your deal? How big of a signature loan would you need to do the next real estate deal you want to do? If you’re thinking about your real
estate ventures as a business, what does any business want from a bank? A line of credit as big as possible. It’s hard for a real estate
investor, but not impossible.

Credit Cards

Even though the interest may be high, think of them as possibilities.

Finding Money - Nontraditional Sources - Chapter E (continued)