Today’s topic is a bit more 201 then 101 for subject matter, but good nonetheless for real estate investors of any experience level. You see, there are two basic type of private money investments: deal specific and what I call time period specific. And each has it’s own thorns to avoid.

Some private money you bring in will be tied to a specific deal. You raise money to flip a house, the house sells, and it’s time to pay the investor back. Other deals involve money being invested for a set period of time (whether loans or equity investments). The return is paid on a monthly, quarterly or annual basis.

A lot of times, when you first get started raising money, you’ll tend to go the ‘deal specific’ route. You may find it easier to have someone commit funds for the time period of a deal, which could be a few weeks to a few months or possible (such as with an apartment building) a few years. Read More→