Matching the Right Private Lender with the Right Property

2015-4-13-260Hey, guys. Lately with the blog posts at Private Money Blueprint, we’ve been talking a lot about the process of finding a private lender interested in loaning you money. We talked about the credibility kit, setting your up-front agreement before you give your presentation, 8 questions I ask in my private money meetings, how to define your program and how to pitch your investing strategy.

The entire process I just mentioned above should be done before you offer them the actual deal. I recommend going through the whole process first and getting a shy, “Yes, I’m interested” before laying the deal on the table.

Once you’ve got that “Yes” it’s time to start matching them up with deals and taking advantage of that funding. Now that we you’ve confirmed you’re doing business together, how do you match the right private lender with the right property?

It’s all about the needs and goals of the investor

Remember, when you met with them, you asked those 8 questions… The questions are part of the program and intentionally draw out the investor’s specific wants and needs. So you’ve got a pen and pad in hand, you’re writing down everything they say, all of their answers to your questions so that you know:

  • What they’re looking for now
  • What they’re looking for down the road
  • The type of return, and
  • The timeframe

This is the kind of information you want to make sure you have access to over time because, typically with the average investor, I don’t plan to physically see them until 4-6 months later when they’re writing me the check. So I’m following up with them during this time, and I know exactly what their needs and goals are because of that first time I sat down and met with them and took meticulous notes.

As soon as I get back home to my computer, I take those notes and go into Outlook and enter all of the information and in the “notes” section. I put when the last time was that I met with them and write down everything that we’ve talked about so that I can access that later.

So that each time I follow up with them, I don’t have to remember all the details since I’ve kept an electronic version of it all. Look, you’re going to be out there meeting with a lot of different people and it’s just too much information to keep in your head. Make sure to take good notes, this is very important, and store them somewhere where you know where to find them.

2015-4-13-matchYou need to know their criteria when you follow up with them. It will help build more credibility and more trust because you’re going to review those notes before you talk to them so you can say “Hey, you know this deal makes sense because…” – and then you list the different needs and goals that you previously wrote down.

It’s all about the exit strategy

Now, whenever you have a deal in play – whenever you have a property contracted, done your research, and your due diligence – you can say, “Hey, I’ve got a great deal on the table right now. I need to get it financed.” Your exit strategy, especially in today’s market, is extremely important, and matching up an investor with your property kind of depends on your specific exit strategy.

Maybe you’re a buy & hold investor, maybe you’re looking to flip properties or you going to wholesale it, whatever…

You know everyone’s got their own strategies. So a lot of times, whenever I urge an investor to flat out say,

Oh hey, this is our plan with the property, we’re going to buy it, we’re going to do an exact amount prepared if that’s necessary and we’re going to lease option the property to someone in hopes to get them qualified to buy it.”

And based on the property and the situation, all of them know typically that transpires and what that looks like. So they have some expectations about the property, about getting cashed out so that we can find the investor and the property that works right for them.

Just remember, matching the right lender with the right property breaks down to two important things:

(1) Knowing the wants and needs of the lender, and

(2) Knowing your exit strategy

USE patrick-signature-image-1-169x300The rest is an art form that can be developed by being thorough and learning how to gain credibility.

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