Your Best Deal Funding Experience

Hey! I have been in investing in land for a few years now. I do land entitlement for national homebuyers. Additionally, I have shifted to rural land for deal funding and flips to keep my capital working.

I would like to hear from operators on their experience with land funders.

  • How do you find deal funders that you work with? Do you reach out to them or do you find them?
  • Do you prefer to be left alone or do you want a deal funder to be an active partner?
  • Are you using the same funder every deal or do you look for multiple options per deal?
  • What would make a deal funding experience a 10/10?

I appreciate the feedback

Thanks,
Ian

Hi Ian,

I’ve done about 20 deals with funders, and my experiences have been mixed—some were great, others not so much.

If you have a good deal, it’s not hard to find a funder. A lot of investors want to keep their capital working. Some funders take 50% or 40%, depending on the deal.

I’ve worked with some who take full control and only pay you after it’s sold. This means they decide when to sell and for how much, and sometimes you’re not kept in the loop. I didn’t like that, especially when the deal was sold for less than expected.

I prefer having an active partner who I can work with to make decisions. Right now, I’m working with Eric from Damen Capital Fund, and they offer a much lower cost of capital—about 7.5%.

I usually talk to a few funders to get the best deal. If the deal looks good, funders will compete to make it work.

Hope this helps!

2 Likes

Try to use creative financing with the seller. Many sellers will carry a note on the property if it is explained properly. This will give the seller tax advantages. Show seller how they can leverage a note to their advantage.

Thanks for the detailed response. Do you find Eric will do 7.5% on minor subdivides or does this only apply to flips?