Raising Private Capital with the infinite money hack- Raise Money like Christian Osgood

Summary

In this video, Christian shares his proven approach to raising capital for real estate deals using creative finance methods like seller financing and joint ventures. He emphasizes the importance of securing a solid, real investment opportunity first, then finding the right debt and equity partners. Christian explains how to present deals to investors, focusing on securing their capital, outlining growth potential, and minimizing risk. He advises against syndication and crowdsourcing, recommending instead a focused, smaller group of aligned partners. His core message: Capital follows a strong opportunity, and a real deal will always attract investment.

Takeaways

• 😀 Start with a real opportunity, not a fake deal. Investors need to be excited about the project before you talk about numbers or returns.
• 😀 The order of raising capital is crucial: **Deal → Debt → Equity**. Always present the deal first, secure the debt, and then bring in equity partners if needed.
• 😀 Deals must cash flow from day one. Positive cash flow is essential for long-term sustainability and investor interest.
• 😀 Don’t pitch fake deals. Present only real, actionable opportunities to avoid burning through investors quickly.
• 😀 When presenting a deal, focus on securing the investor's principal. Capital security is more important to investors than potential returns.
• 😀 Avoid syndication and crowdsourcing for raising capital, as they tend to create misaligned incentives and low-equity deals.
• 😀 Use creative finance methods like seller financing to minimize upfront debt costs and improve cash flow.
• 😀 To raise capital successfully, first find the right deal, then customize the financing based on the project's needs.
• 😀 When seeking investors, focus on presenting the opportunity first, then show how their capital is protected, and lastly, how it will grow.
• 😀 Build relationships with brokers and investors who align with your goals. Christian used his network to connect with four potential investors who each contributed $100,000.
• 😀 Raising capital isn’t about convincing people to invest in a specific idea, it’s about presenting a real, secure opportunity and offering a clear path to returns.
• 😀 Don’t focus on large numbers of investors. The best strategy is to bring in a few, highly aligned partners who share your vision and goals.

Q & A

What is the first step in raising capital for real estate according to the script?

The first step is finding a solid deal—something that excites potential investors. The deal must be compelling enough to get investors interested before you dive into numbers or financing.

What does the 'deal, debt, equity' sequence refer to in the capital-raising process?

The 'deal, debt, equity' sequence is the recommended order for raising capital. First, you present the deal, followed by securing debt financing, and then, if needed, bringing in equity partners to fill the gap.

Why is customizing debt important when raising capital?

Customizing debt is crucial because it allows you to structure the financing to match your cash flow needs. Creative financing options, like seller financing, can help reduce monthly payments or offer more favorable terms, improving the deal's profitability.

What is the role of equity partners in capital raising?

Equity partners provide additional capital in exchange for an ownership stake in the project. While they help buy time and provide more funding, they also require a higher return on investment, which should be considered in the deal's structure.

How should you pitch a real estate investment to potential investors?

When pitching a real estate investment, start by presenting the opportunity itself—get investors excited about the project. Once they are interested, then explain how their money will be secured and outline the potential returns.

What is more important to investors: potential returns or protecting their principal?

Protecting their principal is far more important to investors than the potential growth of their capital. Investors want to know that their money is safe before considering the potential returns.

What are the risks of pitching fake deals to potential investors?

Pitching fake deals is highly risky because it can damage your reputation and burn through investor trust quickly. If the deal you find doesn’t match what you’ve pitched, you’ll lose credibility and possibly your ability to raise future capital.

Why is syndication and crowdsourcing not recommended in the script?

Syndication and crowdsourcing often lead to low-equity deals and misaligned incentives between many investors. The script emphasizes the importance of having a few, well-aligned partners who share the same goals, rather than dealing with a large group of investors.

How does the script suggest you present the security of an investment?

The script advises explaining why the investment is secure by showcasing the equity backing the deal. This can be done by detailing the property’s value, the plan for risk mitigation, and ensuring investors understand how their capital is protected.

What is the key takeaway about raising capital for real estate in the script?

The key takeaway is that the money will follow the deal if it’s a solid opportunity. With the right deal, debt structure, and equity partners, capital will come together even if you don’t have established connections or funding sources.