To locate private money lenders people have employed many different successful techniques.
For instance I heard of a real estate investor that found their investor standing in line at a grocery store. It was a long line and he started up a conversation with an older gentleman standing behind him. The topic came around to real estate after the gentleman asked what the investor did for a living. As soon as the investor said he was a real estate investor the gentleman perked up and said how ironic because he was looking for an investment since the stock market had tanked. It is as easy as that. Now that investor is a millionaire and retired at 35 all because he had the guts to talk with someone while standing in line at the grocery store.
Answer ads placed from for sale by owner properties is another excellent way to find private investors. Having an excellent real estate agent on your side will help you greatly research these properties before you waste your time and the sellers asking for a loan they cannot provide. Most multiple listing services provide agents with a way to see if the owner owes anything on the property and how much and to what bank. Weeding out the properties that do not qualify in the comfort of an office is much better than after you have spent the time and energy to plan an offer and get the earnest money agreement to the seller only to have it rejected because they owe too much on the property.
You can still go to another private money lender, instead of working with the home owner but it makes your life a lot easier and makes your business run a lot smoother if you can know before putting in an offer on a property the exact situation the seller is in. This gives you so much more purchasing power because now you can plan your offer to satisfy what the seller needs and also what the property can provide. This also makes your offers a lot more successful so you are not wasting tome on investments that will never make you any money.
The biggest and best techniques when working with private money lenders is to treat them with the respect you would a boss or a prestigious client and keep them informed of your decisions and you will have an excellent contact for years to come.
I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by going to http://realestatewealthtoday.com/FREE-eBook.html.
Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit.
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
Most investors who seek private or hard money need it fairly quickly. Reasons can include:
–Other Notes coming due
–An unexpected interruption in funding
–A quick takedown of real property being offered at a deep discount
Or, the worst, a Note being called due by the bank without advance notice. Whatever the reason, private or hard money loans usually need to fund quickly.
One of our “preferred” lenders tells us that a loan will fund as soon as it takes them to feel “comfortable” with the deal as a whole. For our lenders to feel “comfortable” with a deal, we must provide specific pieces of information to them which help them get to the comfort zone very quickly.
Getting your lenders to this comfort zone requires a specific checklist that both borrowers AND brokers need to keep in their back pockets. One of the first items on this list is to identify the collateral being used for the loan. This is one of the single most important items that can stand between you and a speedy closing on the loan.
Other important items on the checklist for speedy private or hard money closings include:
If you are concerned about getting your loan funded quickly, use an experienced broker that will know what other crucial items are on this checklist. Often, borrowers will attempt to go to the lender directly, expecting a speedier route to closing. In my experience, not only is NO time actually saved by circumventing the qualified private money broker, but all too often, unnecessary fees are paid to the lender and both money and time are lost.
posted by Blake Reese on March 9, 2009
This is Mike Lautensack and I am starting a new Private Lending Mastermind and Group Coaching Program on June 23, 2009.
Real Estate Wealth Today
http://www.realestatewealthtoday.com/
This is Mike Lautensack and I as mentioned last week we are starting a new Private Lending Mastermind and Group Coaching Program on June 9, 2009.
Real Estate Wealth Today
http://www.realestatewealthtoday.com/
One of the things you want to remember as a real estate investor is the importance of establishing a expert niche. Having a expert status makes you stand out in the crowd as an expert in a specific area of real estate investment and will help you to gain more potential private lenders in your area of specialization.
Advantages of Creating a Niche
It also allows you to focus your marketing plan for that particular targeted audience. Once you become known for helping people in this specific area, you will be more likely to build steady clientele for this particular niche in real estate investment.
How to Create a Real Estate Investment Program
Keep in mind that by developing a real estate investment program you are not limiting yourself. Some investors are under this impression and then make the mistake of getting involved in too much with no focus. In reality a program opens up a world of possibilities and establishes you as an expert with a particular focus in the real estate investment market.
I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by going to http://realestatewealthtoday.com/FREE-eBook.html.
Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit.
If you are starting out in real estate investment your initial challenge is gaining credibility with potential private lenders. The other challenge is how and where to find private lenders and how to get their undivided attention, especially if you are new to real estate investment.
Who Are Potential Private Lenders?
If you look around you, potential private lenders are everywhere. They could be your family, friends, and relatives or they could include business associates, employees, contractors, vendors, or anyone you do business with.
Private lenders could potentially be people that you would never suspect would be willing and able to invest in your real estate deal. Sometimes they are simply people from all walks of life, who are financially able to invest and are looking to get a higher rate of return on their investment. They do not even necessarily have to specialize as private lenders.
How to Connect with Private Lenders
Many of these people have IRAs and other
investments that are currently suffering during the economic downturn.
Most likely these people would welcome a higher rate of return on
investment and especially with someone they know.
A Few Things to Remember
Once you have started connecting with potential private lenders here are a few tips to remember.
I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by going to http://realestatewealthtoday.com/FREE-eBook.html .
Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit.
When it comes to your real estate investment business and attracting private lenders, two-step marketing is much more effective than one-step marketing because it reflects the needs of your potential clients and demonstrates concern for finding solutions to problems. One-step marketing is more self-directed and many of the marketing practices for this technique are focused on self concern instead of the needs of the client.
Two-step marketing allows your prospects to select themselves as your client. Two-step marketing is based on giving information away for free with the hope of getting something back in return.I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by going to http://realestatewealthtoday.com/FREE-eBook.html .
Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit.