The financing options for entrepreneurs

Post number 4.

Fundraising.
Money makes the world go round (Liza Minnelli)

This song plays in my head from time to time.
So what options do I have as an entrepreneur to raise money?

Money partners
They are basically partners in the deal, getting a percentage of the profit analyzer. It can be any conceivable percentage (60-40, 50-50, 65-35…), the partnership brings with it a risk, if financing of the transaction is required, investors will be required to complete.
If their percentages are not diluted. (Bummer).

Hard money
A company that is willing to finance entrepreneurs whether to buy for renovation / purchase for holding.
For the money you get you pay interest.
Usually there is a payment of points and interest, the points is actually the percentage of interest paid at the beginning of the transaction as payment on underwriting the loan and so on.
The loan is recorded against the property.
Here, too, the market is so sophisticated, and there are imaginable companies that will take the interest retroactively / the interest in a monthly payment / balloon… Sample interest rates: 4 points, 7% interest (interest for buying renovation and sale)
The contract with the HML for a short-term allotted period. The contract can be extended for another period… that costs extra money.
The most significant risk of losing the property, that is, if the loan was on 70% of the value of the property, I as an entrepreneur should complete another 30% equity.
In case I have not paid the lender will want to step into the shoes of the developer and take the property and exercise to get the money back for himself. Bummer…

Loans
Bank loans… from the country / USA The traditional and good way. In the US you will get a loan if you have a credit score… or if the property is commercial (sure there are more people here who can add from their knowledge on the subject).

Loans from private individuals
“Loans! Do you want to become a bank? Impress me in the comments !! ” Well, do not see such an advertisement every day, but, it is certainly possible to give loans to entrepreneurs.
Here -> Your bargaining power should work. The interest rate you will receive will beat the interest rate you will receive at the bank.
Risk: the developer did not pay on time (literally sucks)
The collateral he gave is not good enough (really, but really sucks)

Gap financing
I left the last one because it most speaks to my stomach (another second you will understand) Short-term financing -> two to three months.
A balloon loan that helps the entrepreneur arrange the breath to complete the purchase phase of the property and so forth.
An example from last week, an investor that I "got stuck" with raising money, I built on it for the purchase phase. And unfortunately the closing this coming Tuesday, the seller did not bring a willingness to change the date. So I have to offer other investors / entrepreneurs 2% interest per month.

I'm interested to hear -> What way does it work for you What do you like to do?

For you to get it out of the system… here's the song.

https://bit.ly/31rrW4b

Money Money makes the world go ar

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