1) It’s Easy to Get
I recruited my first private money lender when I was 22 years old . . . and if you’ve ever seen a picture of me, you know that I look young for my age. Soooooo, when I signed up numero uno, I looked like I was 17.
People talk about getting private money like there’s a big mystery behind it and say, “Everyone that I talk to wants to hold on to their money right now and is worried about the real estate market.”
That may be someone’s conditioned response but when you educate them on the process, how it works, why it makes sense, and you ask them good questions to elicit their needs and goals, the investment opportunity sells itself.
Come on guys . . . if a 20 something college drop out that looks like a teenager can do it, you can too!
2) Private Money Is All About Personal Relationships
By personal relationships, I mean relationships that YOU build in order to get private money. I often times get asked what one of my private lenders would charge to finance a deal. And I have to tell them, that’s not what it’s all about.
Get out there, spread the word that you’re a real estate investor, that you have great investment opportunities, and cultivate rock solid personal relationships.
3) No Credit . . . No Problem
Private money loans are based on the property, not the person. When you have a great deal under contract . . . let’s say for $120K that’s worth $180K . . . the person that lends you the money is doing so based on you buying the property far under value.
4) Virtually Unlimited Quantity
A private lender is just an everyday person who lends money to you as an investment rather than investing the traditional way through CDs, mutual funds, stocks, and bonds.
Anyone that you know and everyone that you meet is a potential source of private money. Most people, especially in today’s market, are looking for good opportunities to invest.
You’ll never run out of private money prospects for your real estate investing needs.
5) Process of Harvesting Funds
Check out the article 4 Steps to Harvesting Private Money for Your Deals. It breaks down the process to … till the soil, plant seeds, nourish your field, and harvest the crop.
6) Go for the Formal Appointment
This is one of the vital pieces to the private money getting puzzle. Investing in anything is a serious matter and should be treated as such. Once you pique someone’s interest with your 30 second commercial, you go for the formal appointment.
This is where you meet with all decision makers to present your investment program and educate each prospect on your business model and how it relates to today’s market.
7) Use a Professional Presentation
The presentation that you present to your private money prospects should be professional and specifically crafted for optimal success. If you don’t already have one, you can download the private lender PowerPoint presentation that I cultivated over the years.
There’s a script included to show you exactly what to say and how to say it as well. Also, I’ve studied sales extensively and integrated an advanced sales process into the presentation. It’s some pretty powerful stuff . . . enjoy!
8 ) Make Your List
Here’s your first action step . . .
Now, this is a brainstorming session. Which means, do not attempt to qualify your answers . . . just write down what comes to mind. One of the biggest mistakes I see people make time and time again is to disqualify people.
I want you to write down the first five people that come to mind that you could set up an appointment to present your investment program. DO IT NOW!
If you are already reading this sentence, you didn’t listen to me. Please stop reading this and write down five people.
OK, now write the date by which you will have called them to set up your first private money presentations.
By committing to following through on this action step, you are on your way towards getting your next deal financed with private money.
9) Listen to Henry Ford
I thought I would bring in the wisdom of Mr. Henry Ford to help us out a little bit . . .
“If you think you can do a thing or think you can’t do a thing, you’re right.”
This is powerful advice! Your expectations will play a major role in your success or failure at getting private money. The simple fact that there are thousands of investors all across the country that use private money to finance their real estate deals should be proof enough that you can do it too . . . regardless of age, race, your network, your net worth, or any other excuse you may come up with.
10) Follow Up Until They Buy or Die
The key to my success over the years at building my base of private lenders was aggressively following up with people (after I had shown them the PowerPoint presentation) until they lent me money on a deal or told me to get lost . . . and the latter never happened.
After you formally present to someone, you will have gathered some much needed information from your prospect about their needs and goals. Now as you follow up with them, only present deals that match the criteria that you gathered at your meeting.
And use my philosophy when you need to get a deal financed . . . “Ask until.”
11) Where to Find Private Money Prospects
One of the best places to find potential private lenders is at your local real estate investment club meeting. Often times, these meetings are filled with people who have heard real estate investing is lucrative and want a piece of the action but don’t really want to go through the process of learning how to do it themselves . . . that’s where you come in!!
Educate them on how they can get involved investing in real estate without having to do anything other than writing a check.
Also, check out this article on the 4 Types of People Most Likely to Lend You Private Money.
12) Business Card Reversal Trick
This is where you use the back of your card for a marketing message that piques someone’s interest in your investment program without you having to bring it up in the first place.
Here’s what you do . . . on the back of your business card, have a phrase like, “Learn How to Make High Returns Backed By Real Estate! Email at _____ For More Info …”
Now, when you hand out your business card, you’ll have people ask you what this means. Instead of you just telling people about your investment program, people are asking you about it . . . which is where you want to be.
- Patrick & Trevor
