There are several different ways I built credibility.
First of all, like it or not, people make value judgements about you before you even open your mouth. Think about it. What preconceived ideas do you have about a bag lady vs. a movie star? You get an image but the reality is you don't really know anything about them. It is in your best interest to present a well-groomed professional image and make sure your staff members comply as well.
This professional image extends to the meeting location you choose, the marketing items you provide, and your presentation.
This is whether you want to borrow money, buy their house or sell them a home.
The first verbal message should be to gain rapport with the guests. I share that I have lived in the area for 10 years and I have kids in school. I establish credibility as a member of the community. We are in this together. If you lose, I lose - and I'm not gonna lose because I have a lot at stake.
The actual presentation sends one clear, consistent message such as "you loan me money and I'll give you high interest payments". That's it. While I have other facets to my business and other interests, I do not waiver in my message.
Sending a straightforward message in an easy-to-understand way, to convey credibility because there is no "small print." You let them know this is a simple program. These are the simple forms. This is the way it works. Period.
Current action conveys credibility. I always mention one of my most recent deals which is usually that I bought and/or sold a property yesterday or within the last few days.
In my presentation I acknowledge their fears and openly address a big one when I show the slide that says, "What Happens to my Investment if Alan Dies." They usually chuckle because they thought of that but didn't want to say it. I let them know that the corporation is structured to sell properties and their principle and interest will be paid as agreed. Talk about credibility. Have I not crossed all the T?s and dotted all the I's with this presentation?
Also, If you say you are going to do it, DO IT.
Someone might be testing you by loaning a small amount just to see if you are for real. Make sure you send them their interest check at exactly the agreed upon time for the correct amount. I've seen this happen time and time again where the lender comes back a couple months later with more money. Then a few months later they come back with even more money. You must prove that you are for real and that you do what you say.
If you break that trust, it's over.
Finally, I build credibility by being reachable. I have an office that they can stop by. I have an answering service that picks up my calls 24 hours a day, 7 days a week and relays important messages quickly. I have a web site where the lender can see what I'm doing and, they can send me email and I respond promptly.
Credibility is powerful… Learn to use it to your advantage.
Alan Cowgill is a national speaker, author and real estate entrepreneur. Alan has bought or sold over 200 investment properties. His step-by-step system ?Private Lending Made Easy? teaches Real Estate investors and mortgage brokers how to find private lenders. Contact Alan at 937-390-0816 or 866-831-3540. For a FREE audio CD go to http://www.PrivateLendingMadeEasy.com
Wednesday, January 16, 2008
Saturday, January 5, 2008
Private Lending: An Alternative Funding Source
Private Lending: An Alternative Funding Source
From Lil Sawyer
Where do entrepreneurs go when the bank says "No"?
It happens everyday. Well-prepared entrepreneurs are walking into the banks with brilliant business ideas with well developed business plans — and are walking out empty-handed. Many of these professionals are ultimately able to obtain financing from private lender, like Tom McKenzie through business capital brokers.
For individuals who do not want to give up a certain percentage ownership in the business as is often required by venture capitalist and deal with the angel investors who may demand a board position or significant day-to-day control, the private lender may be an alternative worth considering.
On the whole private lenders are looking for the same information and will conduct a similar due diligence as the banks to make a positive funding decision. They are looking for great business ideas, at the right time, with an airtight business plan, that includes contingency scenarios and realistic forecasts, backed by experienced and professional people with some financial stake in the business.
However, most private lenders are “specialists” who engage in higher risk ventures because they clearly understand both the opportunity and risk associated with selected business types or market segments. Private lenders will not only fund project the banks rejects, they will creatively structuring loan repayment and sometimes be a helpful resource.
For example, Mr. McKenzie has a background in the automotive market; accordingly he has funded projects such as automobile dealerships, transportation and trucking businesses and manufacturing for the automobile sector. While he does not have a professional background in medicine, he has also developed an interest in providing capital to medical practices because of the doctor shortage and because doctors on the whole are responsible debtors. Additionally, businesses like wineries are attractive because they are high asset based and offer more security. He will also provide funding in emergency and rescue situations.
When asked how he makes the decision to fund a project, Mr. McKenzie laughs and said, “you do the best due diligence you can and then it’s just like gambling at a slot machine. You put your money in and take the risk and hope for the best. Knowing that statistically some of the businesses will do well and others will fail. You learn the most from failures.” After twenty years of investing in both winners and losers he has developed an evaluation methodology to help him select the businesses with the highest probability to be profitable and succeed long-term.
Given the relatively low profile of most private lenders, Mr. McKenzie says that a significant number of the best projects come to his attention via business capital brokers. “The brokers screen the projects, giving me a wider selection of projects that match my specific parameters”. Business capital brokers will normally develop relationships with hundreds or thousands of lenders and investors, so the key is to sell the broker on your business plan and get him or her sufficiently excited about your project to recommend it to the right lenders or investors.
Lil Sawyer is Managing Director with FundingLinks, a business capital broker company in Toronto that assists entrepreneurs and businesses to secure capital worldwide. She can be reached at 905-427-9726 or by email at lil AT fundinglinks.com.
Private Lending
From Lil Sawyer
Where do entrepreneurs go when the bank says "No"?
It happens everyday. Well-prepared entrepreneurs are walking into the banks with brilliant business ideas with well developed business plans — and are walking out empty-handed. Many of these professionals are ultimately able to obtain financing from private lender, like Tom McKenzie through business capital brokers.
For individuals who do not want to give up a certain percentage ownership in the business as is often required by venture capitalist and deal with the angel investors who may demand a board position or significant day-to-day control, the private lender may be an alternative worth considering.
On the whole private lenders are looking for the same information and will conduct a similar due diligence as the banks to make a positive funding decision. They are looking for great business ideas, at the right time, with an airtight business plan, that includes contingency scenarios and realistic forecasts, backed by experienced and professional people with some financial stake in the business.
However, most private lenders are “specialists” who engage in higher risk ventures because they clearly understand both the opportunity and risk associated with selected business types or market segments. Private lenders will not only fund project the banks rejects, they will creatively structuring loan repayment and sometimes be a helpful resource.
For example, Mr. McKenzie has a background in the automotive market; accordingly he has funded projects such as automobile dealerships, transportation and trucking businesses and manufacturing for the automobile sector. While he does not have a professional background in medicine, he has also developed an interest in providing capital to medical practices because of the doctor shortage and because doctors on the whole are responsible debtors. Additionally, businesses like wineries are attractive because they are high asset based and offer more security. He will also provide funding in emergency and rescue situations.
When asked how he makes the decision to fund a project, Mr. McKenzie laughs and said, “you do the best due diligence you can and then it’s just like gambling at a slot machine. You put your money in and take the risk and hope for the best. Knowing that statistically some of the businesses will do well and others will fail. You learn the most from failures.” After twenty years of investing in both winners and losers he has developed an evaluation methodology to help him select the businesses with the highest probability to be profitable and succeed long-term.
Given the relatively low profile of most private lenders, Mr. McKenzie says that a significant number of the best projects come to his attention via business capital brokers. “The brokers screen the projects, giving me a wider selection of projects that match my specific parameters”. Business capital brokers will normally develop relationships with hundreds or thousands of lenders and investors, so the key is to sell the broker on your business plan and get him or her sufficiently excited about your project to recommend it to the right lenders or investors.
Lil Sawyer is Managing Director with FundingLinks, a business capital broker company in Toronto that assists entrepreneurs and businesses to secure capital worldwide. She can be reached at 905-427-9726 or by email at lil AT fundinglinks.com.
Private Lending
Tuesday, January 1, 2008
Real Estate Investing in 2008: Are You Crazy – Well Maybe Not!
The latest data from the real estate industry shows a marketplace in steady decline and no bottom in sight. Residential home sales are in freefall mode with an expected 25% decline in the total number of home sales in 2007 versus 2006. Additionally, homes sales are currently off by more than 35% from the record year of 2005 when over 7.0 million homes sold.
Industry analysts estimate that we're on track to sell only 5 million houses nationwide for the entire 2007 year, which is the slowest pace since 1999. Equally sobering is the fact that at any given time there are about 4.4 million unsold homes for sale. Based on the number of available houses, it would take about 10.5 months to sell all the houses on the market right now.
It's not just the number of homes sold that is falling; it's also the sales price. The median, or average, home sales price is expected to dip below $211,000 for the year, which represents the first time since records have been kept that the year-over-year price of a home fell.
While home sales are plummeting and sales prices are falling, the only thing that seems to be rising is the number of foreclosures. During the first ten months of 2007, the foreclosure rate nationally surged by about 94%, which puts about 573,000 homeowners at risk of losing their homes.
As bad as things are right now, we might just be at the tip of the iceberg, because more than 2.2 million home loans are going to reset in the next year and a half as introductory and teaser rates end. Homeowners are faced with payments that are considerably higher than they had banked on – or budgeted for. Bush’s new homeowner bailout plan will save some, but will excluded most of the homes that are close or already in the foreclosure process.
Aright enough of the doom and gloom. With all financial bubbles there are many losers but a few big winners. Despite all of the above, now is the time to consider real estate investing. With prices down and motivated sellers everywhere real bargains are popping up and the long term returns on real estate should be outstanding in the coming years. Much of the risk has been taken out of real estate investing.
The housing market has undoubtedly changed, but I still think real estate is one of the best long-term investments you can make. I also think if you know what you're doing, there’s a whole lot of money to be made right now by investing in real estate.
The key to this opportunity is the ability to raise cash or credit quickly to make low all cash offers. The ability to have a combination of cash, credit lines and access to private lending will allow you to make low and compelling offers. In many cases, buyer will forced to accept any reasonable offer.
If you do this, you'll discover that this is possibly one of the best times in more than a generation in which to make tens of thousands of dollars -- or more -- by playing your cards right and timing your real estate purchases in a way guaranteed to help you build a fat real estate portfolio.
Industry analysts estimate that we're on track to sell only 5 million houses nationwide for the entire 2007 year, which is the slowest pace since 1999. Equally sobering is the fact that at any given time there are about 4.4 million unsold homes for sale. Based on the number of available houses, it would take about 10.5 months to sell all the houses on the market right now.
It's not just the number of homes sold that is falling; it's also the sales price. The median, or average, home sales price is expected to dip below $211,000 for the year, which represents the first time since records have been kept that the year-over-year price of a home fell.
While home sales are plummeting and sales prices are falling, the only thing that seems to be rising is the number of foreclosures. During the first ten months of 2007, the foreclosure rate nationally surged by about 94%, which puts about 573,000 homeowners at risk of losing their homes.
As bad as things are right now, we might just be at the tip of the iceberg, because more than 2.2 million home loans are going to reset in the next year and a half as introductory and teaser rates end. Homeowners are faced with payments that are considerably higher than they had banked on – or budgeted for. Bush’s new homeowner bailout plan will save some, but will excluded most of the homes that are close or already in the foreclosure process.
Aright enough of the doom and gloom. With all financial bubbles there are many losers but a few big winners. Despite all of the above, now is the time to consider real estate investing. With prices down and motivated sellers everywhere real bargains are popping up and the long term returns on real estate should be outstanding in the coming years. Much of the risk has been taken out of real estate investing.
The housing market has undoubtedly changed, but I still think real estate is one of the best long-term investments you can make. I also think if you know what you're doing, there’s a whole lot of money to be made right now by investing in real estate.
The key to this opportunity is the ability to raise cash or credit quickly to make low all cash offers. The ability to have a combination of cash, credit lines and access to private lending will allow you to make low and compelling offers. In many cases, buyer will forced to accept any reasonable offer.
If you do this, you'll discover that this is possibly one of the best times in more than a generation in which to make tens of thousands of dollars -- or more -- by playing your cards right and timing your real estate purchases in a way guaranteed to help you build a fat real estate portfolio.
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