1 / 22

Raising Private Money Online Series Class 1: Introduction to Private Money Financing Than Merrill Konrad Sopielnikow Ch

Raising Private Money Online Series Class 1: Introduction to Private Money Financing Than Merrill Konrad Sopielnikow Chris Yates. Your Coaches. Than Merrill. Konrad Sopielnikow. Chris Yates. Why NOW is the time?!. The Money Tree. Cash Partnering Bank Financing Hard Money

dean
Download Presentation

Raising Private Money Online Series Class 1: Introduction to Private Money Financing Than Merrill Konrad Sopielnikow Ch

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Raising Private Money Online SeriesClass 1:Introduction to Private Money FinancingThan MerrillKonrad Sopielnikow Chris Yates

  2. Your Coaches Than Merrill Konrad Sopielnikow Chris Yates

  3. Why NOW is the time?!

  4. The Money Tree • Cash • Partnering • Bank Financing • Hard Money • Subject-To / Owner Financing • Private Money • Self Directed Retirement Accounts

  5. What is Private Money Financing? • Raising and borrowing money for real estate investments from private individuals

  6. Why Private Money? • No BANKS or Hard Money Fees! • Better Terms • Speed of Funding • No Credit Check • No Application Process • 100%+ Financing! • Relationship Driven • Everything is Negotiable!

  7. Types of Private Money • Cash • Retirement Accounts (IRA’s, 401k’s etc.) • Liquidated Securities and Investment Assets (Stocks, bonds, mutual funds, CD’s etc.) • Home Equity • Personal and Business Credit Lines • Credit Partners

  8. Where to Find Private Investors? • REIA and Investor Clubs • Through Real Estate Attorneys • Networking with Busy Professionals – • Attorneys, Doctors, Accountants, Financial Professionals, Other Entrepreneurs • Business and Banking Networking Events • Family & Friends* - Retirement Accounts!!! • Get OTHERS to raise money for you!

  9. Preparing Your Marketing • PowerPoint Presentation or Video • Before and After Pictures or Videos*** • ex. “TRASH TO CASH” from FortuneBuilders Rehabbing Homestudy Course • Credibility Packet • Company Resume / Description • Case Studies Outline and Pictures • Investor Program Description & Answers to FAQ • Business Cards (*Referral Reward Program)

  10. Meeting Investors • Network, network, network… • Learn about prospect’s current investments & goals • Educate your investor about YOUR business • Describe your private money program • Ask if they know anyone who may be interested in making high returns and • Let them know of your referral program • Set up a follow up meeting when interested

  11. How Does it Work? Private Money Meeting with YOU Identify Property Find Unhappy Investor Get Money & Close the Deal Sign & File Investor Security Docs Find Wholesale Buyer or Fix up and Sell House Pay Happy Investor

  12. Private Money Program • 12 % Annual Simple Interest Rate • ex. $200,000 invested for 3 months = ($200k x 0.12 x 3/12) = $6,000 • 6 month term • Principle and Interest payable at sale • Monthly, Quarterly interest payments an option • Secured by subject property • NOTE: You are the owner on title! • Guaranteed 1-3 points (for short term financing) • No costs or effort to investor (closing, processing etc.)

  13. Documents • Promissory Note • Mortgage Deed or Deed of Trust • Hazard Insurance Policy • Listed as “Mortgagee” • Personal Guarantee (***when requested only)

  14. Closing Process Closing Documents w/ Mortgage Deed, Promissory Note Mortgage or Deed of Trust Filed at the Courthouse Funds From Private Money Investor Into Escrow or to Attorney YOU GET: the House INVESTOR GETS: Original of Promissory Note and Copy of Mortgage Deed or Deed of Trust

  15. Common Mistakes or What NOT to Do • Equity stake in a deal (Money Partner) • Tours of properties before pre-screening • Pooling of money between multiple investors • Not associating money with a project

  16. Private Money Success Tips • EDUCATION • Real Estate Knowledge • Understanding the Market & Alternatives • COMMUNICATION • Defining Your Private Money Program • Understanding Investor’s situation / goals • EXCITEMENT FOR THE BUSINESS!!! • Always Recruit New $$$ Investors • Networking, Networking, Networking…

  17. Case Study • 124 Smith Street, New Haven, CT • Purchase Price $100k • As is value of $150k; ARV of $200k • Rehab $30k • Investor lending $130k at 12% • 6 month note • Paid off in 120 days (4 months) • $130,000 x .12 x 4/12 = $ 5,200 in interest

  18. Case Study • 124 Smith Street, New Haven, CT • Purchase Price $100k • Wholesale value of $150k • Investor lending $100k at 12% • 7 day flip • $100,000 x .12 x 7/365 = $230.14 • ***guaranteed 1 point min. = $1,000

  19. CM Yates – Case Study CM Yates Purchase Price = $71,000 Estimated Renovation Budget = $18,000 Closing Costs = $500 Pro-Rated Taxes and Insurance = $1,000 Total Cost Basis = $90,500

  20. Initial Deal Structure • Investor Funds: $100,000 • Lender Fees: $1,500 • CM Yates Cost Basis: $90,500 Remaining Funds = $8,000

  21. Joe’s Earnings After One Year • $100,000 Principal Invested + 1.5 Points = $1,500 + Interest @ 12% = $12,000 = $13,500 Earned in 1 Year 13.5% APY • Secured by Deed of Trust • Insured by Hazard Policy

  22. Q & A

More Related