Question for all the active land investors in need of private money to fund their deals:
What information would you need to know about a private money partner before you’d be comfortable working with them?
Off the top of my head, I would probably start by asking these questions:
How many land deals have you funded in the past?
How many vacant lots have you bought and sold yourself?
What kind of background or experience do you bring to the table (how can you enrich the operation and help us both make the best possible decision on each acquisition)?
How do you expect to be compensated from each deal we do together (what kind of profit percentage or interest rate do you expect in return for your contribution)?
Do you expect to own some (or all) of each property or will you delegate this entirely to me?
Will you take an active role in any part of the buying or selling process? If so, what?
Are you willing to fund any portion of the upfront marketing costs (direct mail or otherwise) to assist in finding deals?
What kind of turnaround time do you expect from each deal (i.e. - what’s the maximum amount of time you’ll allow your cash to be tied up in each deal)? What course of action would you expect if our hold time exceeds this timeframe?
What is your funding threshold? (i.e. - How much money do you have to work with? What size deals are you willing to fund?)
Are you interested in doing any value-add improvements to these properties (rezoning, subdividing, or otherwise) or are you just looking to do quick flips with no improvements?
What am I missing? What kinds of questions would you ask before working with a new money partner? Let’s populate this thread with some great ideas!
What do you look for in a deal? (Size, type, access)
What’s your expected timeline?
Will you fund the owner finance portion?
How long do you take to approve deal?
@retipsterseth , @Justinsliva - good stuff. Recognizing these questions seem to be more focused on a “smart money” partner (someone who can provide some knowledge or value beyond just funds), you might also ask…
Are there specific states/markets that you will or will not do deals in at this time?
@retipsterseth Do you have an article or video about sharing a deal / or getting a private money partner? I’m interested in sharing a deal and would like to know more about the possibilities of how to structure this kind of deal.
@niclas-hk we’ve done a couple of interviews that kind of get into this. They aren’t direct answers to your questions, but you’d probably find some insights from them.
This is a huge topic, with many different directions a deal can go, depending on the wants and needs of both parties, the size of the deal, and many other factors… so it’s hard to condense everything into one blog post.
If you’re looking for funding partners, you could also check out fundmyland.com for some connections.