How To Stay SEC Compliant When Getting Private Money

In the end, the SEC wants a few things and has one single mission.

The SEC Mission (in my words… not theirs): To protect the end consumer/investor from fraud, deceit, and dishonest investment practices .

In a moment, I’m going to share a few tips to help you stay SEC compliant when getting private money… BUT, this is not to be taken as legal advice and is no substitute for legal advice.

Treat your real estate investing business like a true *business* and get your legal bases covered… have an attorney on your team advise you based on your specific business model and the area you’re doing business.

Also, keep in mind that the SEC is nothing to be scared of… some real estate investors use the SEC as an “excuse” for not getting private money… and there’s no need for that.

Simply get educated and get good legal advice.

3 SEC Compliance Tips | Private Money

1) Only present investment opportunities to people who you have a relationship with (i.e. – get to know your prospects before you start offering your private lending opportunities).

This makes complete sense and truthfully… is in your best interest to do so anyway.

A private lender is essentially “going into business” with you on a particular deal. You want to make sure you get to know them, and vice versa before they put up their hard earned money with you and your company.

2) Be honest and upfront with the way you represent yourself, your company, and your investments… and fully disclose all risks and details of what your private lenders will be investing in.

This boils down to basic…

“Do unto others as you’d like others to do unto you”.

Some people feel like they need to hide certain bits of information from their private lenders about the risks of a deal.

DON’T!

Your lenders will appreciate you for being upfront and the SEC requires that you fully disclose any risks of the investment, what you’re going to do with the funds, and the details of the investment.

3) Protect the investor (your private lender) at all costs… including that the investor has the financial means to invest their funds in these types of “non-traditional” investments.

So for example…

… don’t bring in a private lender who makes $30,000 and is investing their last $20,000 with you.

Make sense?

Alrighty, that does it for today…

If you’re interested in additional educational training & tools to help you stay 100% SEC compliant, click below…

>>SEC Attorney Interview & Private Money Disclosure Docs <<

If you have any comments or questions, toss ‘em in the comment area.

Happy Investing!

- Patrick

How to Structure Private Money Loans

There are two primary ways that private money loans are structured… as an equity or debt investment.

Private Money Loan Structuring – Equity vs. Debt

With an equity investment, you’re giving your private lender a portion of the ownership in the property. What portion? It’s up to you. But, I’ll give you an example from one of our students below.

With a debt investment, your private lender is paid a specific rate of return. This is how I’ve structured most of my private money loans. Why? Because most of the time, it’s more profitable. And by retaining 100% ownership of the property, you remain in full control.

Neither structure is right or wrong… just different.

How PMBP Student Justin Wilmot Structures Loans

Justin Wilmot, one of our students kicking serious butt in the Florida market (he’s done more than a dozen deals in the last year since getting started), structures all of his deals straight 50/50 partnership with his private lender.

So, he chose the equity investment route.

… and he never has to worry about financing again.

He brought in one private lender with deep pockets and started doing deal splits. It worked out great for him and his lender so they decided to go into business together.

With cash to close deals at Justin’s disposal, he simply focuses on finding and closing great deals.

How PMBP Student Rob Russell Structures Loans

Rob Russell, one of our Platinum students in Oregon, structures his loans completely different. He chose to go the debt route.

He offers anywhere from 5 to 10% interest per annum and consistently gets private money on the low end of that range. Whoohoo!

Rob shared a cool story about a “Loaded Dentist” recently who contacted him through his PMBP website. After chatting a couple times and meeting, he had a commitment for private money at 7% per annum… no fees, no points, no hoops, no B.S.

Also, you may be wondering…

How Does Your Private Money Lender Get Paid?

It’s negotiable.

Do whatever makes sense based on your deals, your business model.

If you’re doing long term private loans (anything over a year), maybe you distribute the interest earned or profits over time… through monthly, quarterly, or annual distributions.

For short term loans, you could let it accrue until you cash it out.

It’s up to you to determine.

Got a comment or question?

Toss it into the comment area… let us know how we can help.

- Patrick

P.S. – In our full Private Money Blueprint system, module 4 is called The Nuts and Bolts: The Essentials and Specific Steps to Every Private Money Transaction. We cover – step by step – exactly how to close a transaction and give you all the paperwork… and that’s just one small component of our overall private money getting system.

P.P.S. – Need some inspiration? Check this out

Private Money Mastermind Call – Avoid These Costly Mistakes

I’ve learned some tough lessons from mistakes I’ve made investing in real estate. Mistakes that cost me big time financially, mentally, and emotionally.

It’s important to keep in mind that everyone, EVERYONE makes mistakes… doesn’t matter if you’re brand new to real estate investing or if you’re a seasoned veteran.

BUT, it’s how you respond, how you react, what you learn… that makes the difference.

In real estate investing, when things go south, it can mean broken agreements, payments falling behind, liens, judgments, foreclosure, bankruptcy.

You’re undoubtedly heard many stories of hardship over the last few years… from huge multi-million and billion dollar real estate investment companies, developers, banks, mortgage companies…

… but regardless of the adversity faced, there are KEY lessons to be learned and leveraged into your next deal, your business, your personal life.

In this month’s edition of the PMM Mastermind Call, I go in-depth explaining the BIG mistakes I’ve made, how I’ve responded, how I’ve weathered the storm…

You’re about to learn:

• How I created a cash flow nightmare
• How $847K in cash disappeared in only 3 months
• The hardest and smartest thing I’ve ever done in business
• How I successfully renegotiated millions of dollars in private money loans
• 7 key lessons learned from the REI trenches
• and more

You know, most people are scared to admit their mistakes. And I used to be the same way. But, I realized the huge benefits that I can provide other investors by opening up and sharing the tough times I’ve been through.

My hope is that you can experience these through me, learn from them, and avoid them in your own business and life.

This is a very personal tutorial… I hope you enjoy.

(it may take it a min for the video to load… please be patient

Take these lessons and apply them in your business, your life.

… and if you’re going through difficult times yourself, let me know. I’m here to help in any way I can.

I mean it.

- Patrick

3 Steps to Your First Private Money Appointment (plus free script)

No matter where you get a private money lead from – your “warm” contacts, networking, public records – the first major step is getting an appointment.

In that appointment, use the private lender PowerPoint presentation to…

• Educate the prospect on your business model and niche
• Explain why it makes sense to invest in real estate and why you borrow from private individuals
• Handle questions and objections
• Find out your prospect’s investment experience, what return is expected from a good investment, the range of funds available… ultimately, find out your prospect’s needs and goals

The presentation does all of this for you. All you have to do is customize it to suit your business.

After the appointment, follow up with your prospects and pass deals by them that meet their needs and goals.

Now that you understand the process and the presentation, it’s time to get your first appointment.

3 Steps to Get Your First Private Money Appointment

1)  Do NOT Disqualify Anyone

This is very important… one of the biggest mistakes you can make is to disqualify someone because you don’t think they would be interested or because you don’t think they have available investment funds.

At this stage in the game, you’re just looking for practice; you’re looking to plants seeds and spread the word that you’re both a real estate investor and that you have good investment opportunities.

2) Make Your List

Pull out a sheet of paper. Now, write down the first 5 people that come to mind who you could set up an appointment with from your “warm” contacts – people you have a personal relationship with.

And remember, do NOT disqualify anyone.

Could be your brother, sister, cousin, mom, dad, best friend, neighbor, someone you went to high school with, someone from college, someone you work with, son, daughter, another investor, someone you met at REIA, church, rotary, your boss, aunt, uncle, social media friends, insurance agent, Realtor, mortgage broker.

Write down the first 5 people that come to mind. Do it NOW!

3) Make The Call

Alrighty, time to set up your first appointment…

It’s going to be a heck of a lot easier than you think… and using the script below, the meeting you set up will have absolutely zero “sales pressure”.

So, you and your prospect will enter the meeting comfortable and at ease.

Here’s your script to get your first appointment:

Hey <Prospect>,

Did I catch you at a bad time?

Great.

I’ve been getting into real estate investing and have a new presentation on my business. I would really appreciate it if you would help me out and let me show it to you sometime.

I value your opinion and would love some good constructive feedback from you. I’m not selling anything.

Could you help me out with this? It’ll only take 30 or 45 minutes.

Thanks, I really appreciate it.

When would be a good time for us to get together? Where would you like to meet?

Sounds great.

See you soon.

With this script, we’re setting up the appointment based on getting the prospects honest opinion and feedback. So, there’s no pressure. By asking for “help”, we’re bringing in a powerful ingrained human need… the need to reach out and assist others who ask for help.

Many times, half way through the presentation, the prospect will look up at you and say, “You know. I may be interested in this.”

Now you’ve made it the prospect’s idea that their interested in your private lending opportunities… and that’s the most powerful way to sell anything.

And even if the prospect isn’t interested right now, you got practice, you planted a seed (that could come to harvest down the road), and you took action towards your goals…. to get private money for your deals.

Use your first appointment as momentum to set up 5 more. Once you start consistently meeting with prospects and following up with specific deals, it’s only a matter of time.

Now, go get your first appointment.

- Patrick

P.S. – Got a comment or question? Toss it in the comment area and let us know how we can help

Sage Advice From One of My Personal Mentors

I have a special tutorial for you today… and it’s not directly related to real estate investing or private money but is directly related to your success in business and in life.

Have you heard of Jim Rohn before?

If not, I’m pleased to introduce a man who has made a profound impact on my life (both personally and professionally), a man referred to as America’s Foremost Business Philosopher – Mr. Jim Rohn.

Unfortunately I never met him in person. I always wanted to go to one of his seminars but waited too long as Mr. Rohn passed away December 5th, 2009.

But, his legacy lives on through his books, videos, CDs, and all of his educational training programs.

Below is a video that I found on YouTube where he covers some incredible insights he learned from his mentor, Earl Shoaff.

The video is 7 min long… make sure to listen close from the 3 min mark through the end.

Enjoy these simple yet powerful lessons…

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

NOTE: original video was taken down from YouTube due to copyright issues… so I found another to take it’s place… well actual 3 others

This is a series called “How to Have Your Best Year Ever”… great stuff too!

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

I would love to hear what’s on your mind… leave your thoughts, comments, and questions below.

- Patrick

P.S. – If you enjoyed, check out Jim’s book, “The Five Major Pieces of the Life Puzzle”. It’s an all-time favorite of mine.

Here’s Proof YOU Can Get Private Money…

In order to get private money for your deals, there’s something that you MUST have first, prior to learning the specific techniques and strategies.

You must believe that it’s possible to get private money.

But, that’s not all.

You must also believe that it’s not only possible for one to get private money, you must believe that YOU can get it.

So, my goal today is to instill in you, the rock solid belief that you can do this. You can get private money for your real estate deals… even in today’s market, regardless of your current financial condition, regardless of who you know, regardless of what color you are or where you’re from.

… and I’m going to do this by sharing some of our students results.

Below is a small collection of unsolicited emails, Facebook messages, and other online posts from real world people – just like you and me – who applied the Private Money Blueprint and our other training programs… and their businesses and lives will never be the same.

Here’s what a few of our PMBPers had to say…

Enjoy and believe!

Here are a couple Facebook updates from PMBP Platinum student Rob Russell…

This is Shannon (aka Shae) Bynes – PMBPer from our original pilot program…

My friend, JP Moses, did a post over on his blog where he asked readers what their favorite training programs are and here’s another comment from Shae…

And here are a two emails from Private Money on Demand students…

The first pic below is an email from PMBPer, Eric Blow, with an update on his private money getting progress… then a chat message showing how much moolah he’s going to make from his first rehab (a cool $25,000 bucks)…

Gotta love this next one!

Justin Wilmot – surfer dude turned real estate investor – bought and sold 4 more deals, has 3 more under construction… AND sold his boat detailing biz to move full time into real estate investing. Nice!

Check this one out… guess PMBP works even in the Philippines…

Well, as you can see, it doesn’t get much more “real” than this.

Are you inspired yet?

People all across the country, all across the world, people of all shapes and sizes are getting private money to fund their real estate deals.

Therefore, you can too. It’s that simple.

But, it all starts with a belief, a knowing that it’s possible AND that you can do it!

So, go get some private money and turn it into cash profits.

You can do it!

- Patrick

Note: These results are not typical. Most people don’t take any action… therefore get no private money and never make any profits from investing in real estate.

Just don’t be the guy or gal that says it doesn’t work… wrong answer.

Most investors fail because they don’t take consistent determined action, because they look for anyone or anything to blame for their lack of positive results, because they “gave it a try”, because they want something for nothing.

Sorry, but the world doesn’t work that way and neither does real estate investing.

There is no “magic” bullet.

You must work smart and hard to become successful… just like Ben, Christina, Eileen, Frank, Lui, Rob, Shae, Tammy, Doug, Nick, Eric, Justin, Brittany, Larry, and all the other PMBPers kicking serious butt in today’s market.

If you’re interested in joining forces with Private Money Blueprint, you can check out more info below…

The Private Money Blueprint System – This is 100% of everything I know and use to get private money… all the forms, tools, resources, marketing templates, website, and full support.

The Private Money on Demand Training Program – This teaches specifically one technique for getting private money… how to find active private lenders in your local market at a moment’s notice through public records.