Foreclosure Investing Money Can Come From Anywhere
As a foreclosure investor, you never know where your money to do the next deal might come from. In this article I’ll tell you a story about how networking with people might turn up your next private investor.
When I first began investing, I figured I would have to go through the traditional lending channels. But I also knew that was very cumbersome. So I wanted to find a source of private funds. One person said if you don’t have your private funding in place, you can miss out on many good deals. Well, I knew I wanted private funding, but I didn’t know where to look.
In August 2002, I was doing a foreclosure deal with a double closing. Everyone at the closing table was dressed very sharply–except for me. For those of you who know me, you know that I can dress pretty dang casual in any given circumstance, and when I first started this business I did it all the time. Now, I will dress up somewhat for closings, but a tie is still out of the question.
So I did this deal with all these well-dressed guys there. When we finished the closing, the mortgage lender for the buyers came up and introduced himself to me. I will call him “TB”.
TB said that he had seen the numbers, and that I had made more money then anyone at that table. My response was my usual: “Well, you win some, and then you win some that are bigger.” And I left it at that.
Well, funny how things happen. I did another deal, and at the closing table sitting across from me was TB. This was a stinky deal. But TB’s professionalism and his ability to work under pressure and get the deal done impressed me. I told him so after the closing. Again, he said that he saw the numbers and he still was pretty impressed. This time, I had a business card and gave it to him.
The next morning, TB called. “I may have a business opportunity for you,” he said. And we scheduled a time to get together.
At lunch, TB asked if I ever needed money. He saw how much creativity and enthusiasm I had for the deals I was doing. He also was impressed by the fact that I always seemed prepared. He offered to fund deals, up to 90% LTV. That was the difference between him and “hard money” lenders.
I thought to myself, BINGO!! I had been looking for money, but didn’t know where to get it. Now, I had an investor. TB’s money was expensive–12% interest and 50% of profits–a very, very steep price! However, at that time I needed the money to do my real estate deals, and TB became a source of my funds.
These days I use 12% money on a regular basis and this works just fine for me now.
The lesson of this article: never be surprised where your funds can come from!
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Paul Wells has been investing in foreclosures full-time for more than 5 years. For more foreclosure investing secrets like the one in this article, subscribe to Paul’s Free Foreclosure Investing course here: http://www.FreeForeclosureInvesting.com.
