Raising Capital for Fix and Flips

Mike: Welcome back to the FlipNerd.com REI Classroom where experts from across the real estate investing industry teach you quick lessons to take your business to the next level.

And now let’s meet today’s expert host.

Frank: Hey, guys. My name is Frank Cava and I am today’s host of the REI Classroom. What we’re going to be talking about today is how to raise capital.

Mike: This REI Classroom real estate lesson is sponsored by acebusinessfunding.com.

Frank: So let me just give you a quick insight to what I do and what I’m trying to raise capital for and hopefully we can deliver this in a way that will help you in your business.

I run a full service real estate investment company. What that means is we send out direct mail, we do wholesale, fix and flips and rentals. What we’re going to be focusing on today is how to raise capital for either fix and flips or for rentals. Now, they’re both similar but they’re a little different and there’s some art in how you present both in order to get the money that you need.

The question that I’m asked the most about, though, is how do you raise capital for fix and flip deals, so we’ll talk about that and at the end I’ll show you how you to link it to the rentals.

So here’s how it starts and this is how it works for me. The first thing is I’m always prepared to talk about what I do for business. And what I do is what I just explained to you, but a cooler way to say it is I do just like they do on TV. I take old houses, I add value and I sell them and make a huge profit. And I will be able to say that at a drop of hat to anybody. They call that an elevator speech because if you only had a couple of seconds in an elevator with somebody and you need to properly convey what you do. And if I’m ever asked invariably about what I do that is how I present it. I use that line right there.

The other thing that I talk about is our track record. I always use very specific results, and the reason for that is in talking about myself and my business, if I give specific successes people that might want to invest money this will just kind of plant in the back of their head. The other thing I talk about is returns. So I will say we pay between this percent and this percent and the upside of that again is the fact that if it’s somebody who may have some extra money or they may not, or they may know somebody, if you just plant the seed in their brain about how much it is that you do pay, the light bulb will go off eventually and they may come back to you and ask for some of that money, or for some returns on their money.

The other thing I talk about is our success rate. We’ve been doing this for a very long time. We have a 0% default rate which means we’ve paid everybody back 100% of what they were owed plus the interest that we promised. So we make sure that we mention that. I’m going to at the end put a really pretty bow on this and give you my speech and you can mimic it and then alter it the way that it fits you.

The other thing that I think is really important to realize is that you may say hey Frank, great, you have a ton of experience. I don’t. How do I implement this into my business not knowing as much as what you know? The answer is this. You can always use a speech like mine, you can curtail it to your life and you can also say instead of using real stats that you’re doing, you can say I’ve been educated by people who have done this many deals. And if you spin it that way you get to use the accomplishments of others while you are in fact pitching for a little bit of capital for your business. I hope that makes sense.

One of the courses that I offer, if you’re interested just reach out to these guys and they can get it from me and I’ll be happy to share it with you, is a course that’s called the elevator speech on how to raise private capital and it’s the cornerstone of how I go about raising money. It’s worked for me. I’ve raised millions of bucks that way and I know it will work for you.

So let’s backtrack and do this. How do you raise capital? Again, it’s a quick elevator speech and this is what mine sounds like. “Hey, thanks very much for taking an interest in what it is that I do. Have you ever seen those shows on cable TV that people take old crappy houses, they fix them up and make huge profits? Well, that’s what I do simply. I do a bunch of those a year, somewhere between 15 and 30 depending on the year. I run a whole real estate business around it but that’s the crux of what it is that we do. Over the past five years we’ve done over 200 of these deals. Of the 200 that we’ve done more than 90% of them have sold in less than 30 days and anyone who’s ever invested with us, we borrow money sometimes from private people, we pay somewhere between 6 and 12% depending on the deal and the length and terms. But anyone who’s ever lent us money has always gotten back their full investment with interest. We have a 0% default rate in the past five years.”

That’s my speech. Again, you can curtail it if you ask me to do it again in five minutes it’ll probably sound a little bit different because it’s guidelines and parameters but not exactly the same. And if you use those in your business you can raise tons of cash.

So again, my name if Frank Cava. You can find me at the XperiencedInvestor.com, and I look forward to seeing you again real soon. Thanks.

Mike: AceBusinessFunding.com can help you get access to up to $150,000 in revolving credit lines to fund your business, with rates as low as 0% for the first 12 to18 months. Use the funds for startup costs, marketing, inventory . . . heck, you can even use it to buy houses and pay for rehabs or almost anything else that your business needs. If they can’t get you funding, you don’t pay a dime. Get funds for your business today at AceBusinessFunding.com

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