1 Easy Credibility Getter with Private Lenders

Today I want to share with you an easy strategy you can use to cultivate more credibility with your private lenders.

Let’s start at the baseline here – private money! As investors, we all value it, we all need it – having access to the capital that you need to do a deal. Even if you’re a wholesaler, having access to capital can make all the difference in the world. With ready cash, you can make strong offers. You can go out there and sling contracts all day long and know that you can put your money where your mouth is.

But how do you build credibility?

Private money is a lot cheaper than hard money; the terms are a lot easier. It’s just a good move for most investors. That’s a given. The problem is – especially when you’re newer and you haven’t done that many deals…

  • How do you present yourself to your private lenders as bankable?
  • How do you have them put their faith in you?
  • How do you build credibility?

A quick tip

I want to share with you an easy strategy that’s really going to help you as it helped me early on in my career. It may seem deceptively simple, but I promise you that if you apply this, it will make a huge difference. Here’s the deal:

Get testimonials. Document them and show them. Duh, right?

Let me dig a little deeper into this. It’s really a pretty big deal. I promise you it’ll pave the road with credibility as you engage private lenders out there.

A degree of impact

Let’s say you go to a potential private lender and say:

“Look, here’s my fancy PowerPoint presentation. Let me walk you through it. Here are the types of contracts that we use. Here are the types of deals that we do. And here is blah, blah, blah, blah…”

This does have a certain level of impact on them. It shows that you know what you’re talking about. You’ve got your stuff together. You have a plan. That’s good. All of this will help build credibility.

Then you might say:

“I also want you to know that you can count on me. I’m bankable. I’ll always do what I say I’m going to do.”

That’ll go a certain distance with them, too. This is especially true if you’re believable when you say it – you have good eye contact, you have a good presence about you, and you don’t seem shifty. All of this will give a certain air of credibility.

Let others say it

But, when other people say that you’re somebody worth doing business with, and that you always do what you say you’re going to do, and that they are pleased to have done business with you, suddenly your credibility level spikes.

awesomeThink about it. You might hear any business out there in the marketplace make a bold statement. For instance, Dominoes promises to deliver fresh, hot pizza in 30 minutes or less or you get it free. (That used to be their tagline back in the day.)

That’s a big, bold statement to make. As a consumer, you wonder about it. They’re saying it about themselves. You want them to prove it.

Let’s look at this another way. One of your buddies says to you, “I order pizza from Dominoes all the time, and they always deliver fresh, hot pizza in 30 minutes or less. They not only say it, but they do it.” Now you’ve got social proof. Proof from someone who is not with that business, and they’re testifying that what Dominoes says is true.

How it fits your business

Translate that over to you and your business. If you have other people saying to this private lender in their own words something like:

“John Investor is someone I’ve done business with. I was pleased with the results, and here are a few details of what we did. He’s a man of high integrity; and he always does what he says he’s going to do.”

This is huge.

A testimonial section

I want you to picture part of your presentation as a testimonials section. A page – a printed page – where you’ve taken screen shots of emails in which people have given testimonials. Maybe they’ve given you handwritten notes. That’s even better, because it’s so believable.

This will be especially effective if it’s someone who has ever loaned you money. Any previous private lenders because it doesn’t get any more relevant than that. It can also be anyone you’ve bought a house from; anyone you’ve ever sold a house to.

Think outside the box

You may be seeing the validity of this, but you’re saying, “I’ve not done a lot of deals, so I don’t have that to lean into. I’ve never borrowed money. I’m still trying to get my first private lender.”

Time to think outside the box. Are there any industry professionals that you’ve worked with? Any Realtors who have a few initials after their name? Perhaps they could verify that you’re a person of integrity.

2014-10-13-boxAre there any other industry professional colleagues who might give you a reference? What about a closing attorney? Maybe it’s the one you bought your personal residence from. Have them write a note explaining that the closing went smoothly and that he would be pleased to do business with you at any time in the future.

Think of any other professionals that you can bring in who could share their experience, or their knowledge of you as a person of integrity. Be creative with this.

You should embed credibility via social proof into any presentation, or any conversation that you have with a potential private lender. Also take time to embed it on your website.

Be intentional

This will not happen by accident. You’ll have to be intentional about it. You can’t sit back and wait for it to happen.

What I recommend is that you make a list of everyone you’ve ever done business with in the real estate space that might do you a solid and write you a testimonial. Then go out and intentionally get them.

After that step is completed, from that point forward, every person you ever do business with, ask them to write a testimonial for you. Make that a normal part of your routine.

If you add testimonials into your business model, I can guarantee that you’ll quickly build credibility.

Your thoughts and ideas…

How have you used testimonials in your business? Do you have a unique way you do this? If so, leave your comments below. We want to hear from you.

Patrick RiddleHappy Investing,

Patrick

PS: If you don’t know how to access local private lenders, here’s a great way I discovered a while back on how to find them through public records. Check out this info and details!

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One Comment

  1. Hi,

    Good idea. I have no experience in investing at all. I have a very low income and I would like to change that. I do have an excellent credit score and I do have a couple of people I could get for references , so anyway enjoyed your article .

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