Hi Folks
Could anyone tell me how to go about finding a money partner with a big fat wallet. And what experience have you had with money partners. What is usually involved?
Cheers
Leigh K[
]Carve your own path and lead the way …
oooooooooo me too!
How big a wallet are we talking about <10Mil?
Cheers Richard
[email protected]
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
are we talking cash or credit? cause i got plastic
My partners and I fell into an arrangement with someone met via work. A chance meeting ended up with us suppling cash for a great return – 40% for 3 months.
As for finding wallets, may be difficult – perhaps someone on the forum may have contacts.
For us as wallets, it depends on timeframes and returns.
In the business world, there’s plenty of money around for opportunities >$10MM right now. This is where the main game is at. Just make the numbers stack up.
Rubbachook
This is what I want to know is how to find these contacts. Do you know?
Cheers
Leigh K[]Carve your own path and lead the way …
Hi Leigh,
I would say a good starting point would be to go to as many seminars as you can.
At Steve’s seminar on the weekend, Steve asked if there anyone looking for money partners etc..so that people could network.
Good luck,[
]Del
I would have thought that any sort of borrowing would be much better in the long run than a joint venture, as if you’d use a money partner you’d probably have to give away a larger share of the profits (50 percent even???) than you would if you were borrowing from the bank or a non-conforming lender…. thoughts anyone?
Hi Mini,
It depends on how you want to use the money partner. A money partner can increase the amount of borrowings you can get from a lender, thus increasing the overall profit. 50/50 of 10% return on 5M is better than 100% of 10% return on 2M.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Only a fool would lend money to someone with little or no experience.
So, for example, finding a development site for a block of 20 units (or even as little as 4 or 6 units) and thence looking for a money partner
is an impossible task if you haven’t been involved in this type of thing before.The solution is to start off small and get some experience.
Pisces133
Hi PeterM
Just wondering who you where refering to?
Cheers
Leigh K[]Carve your own path and lead the way …
Leigh my post was in response to how I interpreted Rubbachook’s post when he/she (?) said :
>>In the business world, there’s plenty of money around for opportunities >$10MM right now. This is where the main game is at. Just make the numbers stack up.<<
The above paragraph gave me the impression that
some people appear to think that it is only a case of the numbers stacking up.It isn’t.
Clearly a lot of things can go wrong with a project.
Some examples ? I know of a builder who did a project in Bellevue Hill (NSW) and who was blamed for the foundations of a neighbour’s house being washed away in a torrential rainfall.
The outcome of his neglect was that that builder is now bankrupt.
What do you think will happen if other building problems pop up ? If one has no practical experience one wouldn’t know how to solve and handle such problems.
I know of someone else whose building was stopped by council because he hadn’t applied for a working zone in front of the development site.
That incurred him unanticipated additional holding charges running at $ 16 K per week !!.
Would one be of a sound mind if one were to put one’s money into funding a deal with an inexperienced developer as partner ?
I have seen many posts by people (not necessarily in this particular thread) who are in an euphoric mood and think everything is plain sailing. It isn’t. There ARE many pittfalls one can encounter along the way.
Pisces133
PeterM,
In response to your post, although experience is beneficial when entering real estate development, I personally know several savvy “developers” who entered the game with no experience, and simply hired competent representatives – i.e. project manager, architect, etc.
Sometimes it is not what you know, but how you leverage the experience of others. As an investor I will often put the “teams” experience ahead of the person with the idea – no matter what the individuals experience.
It would appear the costly mistakes you have outlined are more a lack of using competent people [and insurance], than knowing how a development works from start to finish.
In response to another post re: leveraging banks vs. OPM [Other People’s Money]. More than often wealth is generated through OPM, not banks. C2 summed this up “50/50 of 10% return on 5M is better than 100% of 10% return on 2M.”
— Michael [Washington DC]
PeterM,
I completely agree with you that one would be ill-advised to enter into a substantial opportunity on the basis of some attractive numbers.
I am sorry if that is the conclusion you drew from my post.
My point was that you certainly will not get a look in from any of these substantial funders (from reputable companies) if your numbers DON’T stack up. This is only one part of the equation, but it is clearly a gatekeeping issue.
MichaelR, it isn’t me who stops one getting finance.
Say one found a site suitable for even just 10 townhouses and the deal stacked up. If one hasn’t got any money , well find a moneyed partner for the deposit etc.
If one thence approached a bank or a finance company to borrow the rest one will find that one will be refused if one hasn’t got experience despite the fact that one can come up with a sizeable deposit.
The lenders are in a position to pick and choose the borrowers so why would they look for headaches with inexperienced people ?
Pisces133
PeterM
I myself have an investment/development company which finances relatively large real estate projects in Australasia.
My point being, more than often the so-called “developers” experience can be a small factor in the decision making process – in terms of lending capital. Risk is off-set by the experience of the “development team” as a whole – and the projects feasibility.
I would suggest the same could be said about most private finance companies. Of course, institutional lenders, such as banks, take a more conservative approach, but they too will not discount a loan based solely on one persons limited experience if the concept is feasible and qualified people are involved.
I do not wish to question your point of view, rather highlight [for people on this board] the fact that raising capital is not necessarily dependent upon an individuals experience.
— Michael
>>I myself have an investment/development company which finances relatively large real estate projects in Australasia<<
I don’t know what exactly you are saying in the above paragraph Michael.
Are you lending money or borrowing money ? If it is the first then please let us (me) have your email address.
Pisces133
PeterM
The company reference was to qualify my experience in working with people seeking capital for real estate projects.
Yes, we finance real estate developments, and as a developer, we also leverage institutional funds.
Although I appreciate your interest, my intention was not to solicit business, rather provide further insight for those interested in this discussion.
— Michael
EnjoLady
Talk to Small Business Victoria if it is property development or the like you want to get into and you need money partners for this.
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