Mike Lautensack
Private Money Lenders - Where to Find Them and Grow Your Real Estate Investing Business
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.
12 Powerful Tips to Getting Private Money
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
Checklist for Fast Closings of Private or Hard Money Loans
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.
- What is the collateral or how is it classified?
- What is the value of the collateral being used?
- What is the value based on? (local comps, broker’s opinion, appraisal, etc.)
- Where is the collateral located? (Can it be readily accessed for inspection?)
- What encumbrances or liens are currently on the collateral?
- Who has Title to it?
Other important items on the checklist for speedy private or hard money closings include:
- 1. Who is the borrowing entity or individual? If borrower is an L.L.C. or corporation, who are the members? What is the contact info. for all borrowers?
- 2. Use of Funds: Lenders will need a brief but descriptive explanation for the use of the loan proceeds. If there is any cash out requested, borrowers will need to substantiate every dollar of the cash out. This is usually shown best with a basic spreadsheet.
- 3. Basic loan application: Primary borrower will need to provide a full loan application which includes social security number, date of birth, list of assets, etc.
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
Preview Call - Private Lending Group Coaching Program
This is Mike Lautensack and I am starting a new Private Lending Mastermind and Group Coaching Program on June 23, 2009.
Teleseminar Series: Thursday, June 11, at 8:00 PM Eastern
To sign up for this FREE tele-seminar simple click here ===> http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
- A complete system for achieving success using Private Lenders...
- The advantages of using Private Lenders compared to traditional mortgages or hard money lenders!
- Discover the 6 keys steps to setting up a Private Lending program...
- Where to find Private Lenders and what "NOT" to do in marketing for Private Lenders
- FREE Bonus for everyone that registers and attends!
- And of course, a whole lot more!
It will be this Thursday night (June 11)!
To sign up for this FREE tele-seminar simple click here ===> http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
Check for the time in your area...
- 5:00pm Pacific Time
- 6:00pm Mountain Time
- 7:00pm Central Time
- 8:00pm Eastern Time
To sign up for this FREE tele-seminar simple click here ===> http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
Thank You,
Real Estate Wealth Today
http://www.realestatewealthtoday.com/
To sign up for this FREE tele-seminar simple click here ===> http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
Private Lending Mastermind and Group Coaching Program
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.
Teleseminar Series: Tuesday, May 26, at 8:00 PM Eastern
To sign up for this FREE tele-seminar simple click here ===> http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
- A complete system for achieving success using Private Lenders...
- The advantages of using Private Lenders compared to traditional mortgages or hard money lenders!
- Discover the 6 keys steps to setting up a Private Lending program...
- Where to find Private Lenders and what "NOT" to do in marketing for Private Lenders
- FREE Bonus for everyone that registers and attends!
- And of course, a whole lot more!
It will be this Tuesday night (May 26)!
To sign up for this FREE tele-seminar simple click here ===> http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
Check for the time in your area...
- 5:00pm Pacific Time
- 6:00pm Mountain Time
- 7:00pm Central Time
- 8:00pm Eastern Time
To sign up for this FREE tele-seminar simple click here ===> http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
Thank You,
Real Estate Wealth Today
http://www.realestatewealthtoday.com/
To sign up for this FREE tele-seminar simple click here ===> http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
Real Estate Investors - Learn Why You Need a Niche to Make Yourself Stand Out
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
- Make Your Services Stand Out: Specializing in a real estate investment niche allows you to market your services as unique and distinguishes you from other run-of-the-mill real estate investors who tend to dabble in everything.
- Become the Expert: Having a specific niche in real estate investment allows you to focus on one or two areas and establish yourself as an expert. If you tend to dabble in everything you never really become an expert at anything. It is kind of like the old saying "jack of all trades and master of none." With a niche, people will begin to see you as the "go to" person for your particular specialization in real estate investment.
- Target Your Audience: Specializing in a particular niche allows you to focus on a targeted audience. For instance, if you specialize in housing for the elderly, you will most likely be referred to repeatedly as the expert in investing in housing for the elderly.
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
- Self-Assessment: You have to do some self-assessment to find out where your interests are with regard to real estate investment. Perhaps you are interested in helping others find low income housing or maybe you want to deal with vacation second homes. Whatever it is, make sure you like it because you will be dealing with it on a daily basis once your business begins to grow.
- Who You Enjoy Working With: Figure out who you enjoy working with and then discover what types of properties interest this sector of clientele. For instance, if you like working with the elderly, then find out what types of properties are involved with the elderly.
- Geographical Area: Consider the geographic location you wish to work with and the types of properties in that location that interest you. Again, the properties should correlate with the clientele that you are interested in dealing with.
- Decide on Property Type: Find out if you are interested in working with rentals, one-family homes, commercial properties, or something else. Choose one property type and specialize in it. The property type that you work with is one component of many in developing a niche in real estate investment.
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.
Real Estate Investors - Where to Find Private Lenders and How to Get Their Undivided Attention
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
- Networking Events: Attend seminars, conventions, and professional networking group gatherings. Develop a great 60-second elevator speech and talk to everyone at these events. Ask them questions about themselves to get to know them. If they do not seem to be interested, ask them if they know of anyone who is interested and give them your business card.
- Real Estate Entrepreneurs and Landlords: Try obtaining a list of real estate entrepreneurs, investors, and landlords and start networking with them. Perhaps they can also be part of your two-step direct response marketing plan. Send them a postcard or letter offering some free advice or information and encourage them to contact you. If possible call them up and speak to them directly.
- Church Contacts and Neighbors: Sometimes the people you would least likely expect to be interested in your real estate deal are the people you see in your everyday life. This includes people you see at church, your neighbors, and friends of neighbors.
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.
- Retirees: This is a great area to investigate because many retirees are looking to make more money in their retirement, especially during the current economic crisis. Many of the retirement plans for these people have suffered due to the current economic conditions.
- Casual Contacts: Make an effort to talk to contacts while conducting your business or running weekend errands, going to the store, or waiting in line at the coffee shop. Have your elevator speech handy and casually strike up a conversation.
A Few Things to Remember
Once you have started connecting with potential private lenders here are a few tips to remember.
- Show Concern for the Lender: When striking up a conversation, show concern for the person and tune in to their needs.
- Be Concise and Stay on Topic: When talking about yourself be concise when explaining what you do and stay on the topic. Do not bore the other person with details about yourself they could care less about. Offer enough information that shows your expertise and show that you may have a solution to the other person's problem.
- Keep a List: Maintain a list of everyone that contacts you for further information. In the beginning it will start with only a handful but, over time if you are consistent in trying to connect with private lenders, that list will grow and you will be able to cultivate it over and over again.
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.
Real Estate Investing and Marketing: How to Use Two-Step Marketing to Attract Private Lenders
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.Steps to Using Two-Step Marketing
- Send Out Marketing Piece: Two-step marketing begins with you sending out a marketing piece such as a letter, postcard, email, or other type of marketing tool. The initial marketing piece offers something for free and encourages the prospects to contact you for more information. Essentially you are initiating a conversation with your prospect through this marketing method.
- Provide Additional Information: Once your prospect contacts you, you would then provide them with additional information. This information could include a free report, free e-book, letter, or something else that provides the prospect with high quality information and advice on real estate investment.
- Set Up Contact: When the prospects contacts you for the second time, set up a one-on-one meeting or invite them to a free seminar or presentation that you are providing on real estate investment. Invite them to learn more about your program and your expertise in your real estate investment niche.
Private lending is a relationship type of business so you must remember this when setting up your two-step marketing plan. You must establish a relationship with potential private lenders and remember not to sell them. No one likes to be sold so; you have to present yourself as a welcome guest that offers high quality knowledge and expertise.
This is the nice part of two-step marketing because the client is contacting you, which permits you to go a little further into what it is that you do and why you are the solution to their problem. In the long run, this is an easier method of marketing because you are developing relationships with future private lenders and offering them something in return for their business.
If you opt to go the one-step marketing process you will most likely fail to attract private money. This is because with one-step marketing you risk coming across as serving yourself without concern for the needs of your clients which is a real turn-off to people who are considering doing business with you.
Instead, present yourself as knowledgeable in your field, give away things for free, help others, and you will attract a lot of people that are eligible to invest in your real estate investment deal.
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.
Private Money Lending: Do I need an Appraisal or CMA
What is a Comparative Market Analysis? A CMA can vary in length from two pages to 50 pages depending on complexity of the property and number of comparable properties. A CMA is an evaluation of a home's value based on available local market data including:
• How much homes similar to yours have sold for recently.
• How long these homes were on the market before they sold.
• How fast you can expect to sell your home at your desired asking price.
• What your "competition" would be should you decide to put your home on the market right away.
But the answer to this questions is to use whatever you have available to use at each point in the process. Before you make an offer and need to have a good, but not expensive, indication of what the property is worth a CMA will serve this propose very nicely without spending any money. Most realtors will be happy to run a CMA assuming they are part of the deal and will get paid at closing. But keep in mind a CMA is just a "quick and dirty" analysis is worth and not to be related on without your review and analysis of the report. In other words, do not accept any computer generated report without doing your homework.
Once you have made an offer and it has been accepted, you may want to spend the typical $300 to $400 for an official appraisal. Even when dealing with private lenders you need to be able to show them that their loan will be secured by a property that is greater than the amount they are loaning to you. Typically private lenders do not want to go over 75% loan to value. An appraisal will also help you in determining how much money you may borrow from a first mortgage lender and how much you may borrow from a second mortgage lender.
To learn more about private lending please go see my eBook title "Private Lending Secrets for Real Estate Investors by going here ==> http://www.private-lending-secrets.com/