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Last month I had a plumbing problem at my home and called a friend to ask, “Who should I call?” I remembered him having a similar issue last year. He said he “had a guy” who could help. Problem solved.

Now, if you need a plumber, I have a “guy.” Anything I need, I can usually call someone and they have a “guy.”

When it comes to alternative investments and especially private equity offerings, I am the “guy.” In response to my clients asking for more investment ideas, I became the “alternative investments guy.” I know how to find opportunities to make people money.

Private equity is capital/equity raised by companies to develop new products, make acquisitions or strengthen their balance sheets. The equity raised might be in the form of senior or mezzanine debt. The amount of a private equity offering may be a few hundred thousand dollars or many millions.

Private equity is not traded on any exchange, and high-quality private equity never hits the street. The only way to find the good stuff is if you have a “guy” with his or her ear to the ground. Normally, a high-quality private equity offering is grabbed up by the insiders and close friends of the offerer. To win at this game, it is all about whom you know. This is where you need the “guy” to get you inside the velvet ropes.

I see a lot of private equity offerings, and most, probably 90 percent, are not even worth a second look. Eventually, maybe 1 percent will make my cut and be presented to my clients. It is my job to find the best offerings with the best returns.

If an offering is so industry specific that only insiders can get their arms around it, I pass. If it is too good to be true, I run, fast. It is important to understand what is driving the deal. Ask questions: “How can they pay better than expected interest?” “How can they afford to pay me back and still achieve their objective?”

And it is extremely important to remember that private equity carries risk.

A private equity raise is accompanied by a private placement memorandum and the investor must be accredited. To be accredited, you must have a minimum net worth of $1 million, have made at least $200,000 for each of the last two years, and expect to make at least that much this year.

In most investments, and in private equity, a better payout to the investor normally translates into greater risk. Investing in private equity is not for everyone and must be considered highly speculative. You had better know a “guy” who has a line on the people involved in the offering, and you need to research the deal from every angle.

Private equity can present some wonderful investment opportunities and at the same time may carry considerable risk. Know what you are getting into, do your homework and get comfortable with the people involved.

You do not want to get into a situation with some strangers from New Jersey who say, “What’s-a-matta-you? Hey, I gotta guy that has a deal for you!”

Daniel Ochylski represents commodities trading, private equity and real estate firms. To reach him, send an e-mail to dano@growthfp.com.