How to Present a Deal to Your Private Money Prospects

When you decided to get in bed with private money prospects, I bet you had no idea you would first have to play matchmaker. Or did you?

In my last (awesome) post, we talked about how to match your private lenders with the right properties. Now, assuming you’ve had the chance to watch and learn (eh-hem) my private lender presentation, assuming you can now better explain to your prospective lender how your program works, assuming your investor is “all in” and assuming you’ve matched the right investor with the right property…

…you’re now ready to move on to the big(ger) leagues. (And the crowd goes wild!)

Presenting your opportunity; you have options

There’s no one way, no textbook formula to presenting your private loan opportunities. Truth is, how you present your opportunity and what communication vehicles you choose to use will depend mostly on your relationships with your prospects and what kind of rapport you have with them. But several key factors will remain constant, no matter the presentation method.

Let’s first talk options, shall we?

The Personal Phone Call

If you know your prospective lender well, by all means…pick up the phone! A phone call is the most personal method of proposal (short of a face-to-face presentation), so if you’ve already established great rapport and/or presented opportunities in the past, the call is your calling.

The Formal Email

If you’ve got a large list of prospects to crank through, use the tried and true email method. For me, this works best after I’ve called the prospects that best fit the opportunity at hand. Think of this presentation practice as more of a follow up to the initial phone call.

The Old School Fax

It’s impersonal, it’s archaic to some, but it works (similarly to the email method) if you’re blasting your lender opportunity to a large list of qualified investors. But again, be sure to send the fax only after you’ve made contact on the phone or through email.

The Costly Direct Mail Method

If you’ve got some extra cash, try direct mail. But think of this method as a last resort. Only send direct mail if you’ve exhausted all other communication options, and you’ve been unable to get in touch with prospects. It’s good to know you’ve got this option, right? But use it sparingly and only when absolutely necessary.

Face 2 Face

If you’re dealing with a brand new lender, I highly recommend going the face-to-face route. In-person meetings will offer the chance for you to present your opportunity in the most convincing light possible, not just through words but through body language, eye contact and facial expressions. Don’t underestimate the power of being physically present.

Presentation 101; always include these basics

It’s all about the relationships you have with your private lender prospects, and the nature of those relationships will dictate how your present your deals. Safe to say we’ve fully grasped this concept, right? BUT you should always include the following key elements to help elicit a quick decision from your lender:

• Date note was issued (when you originally initiated the request)
• Date you’ll fund the note (when you need the money by – always allow for plenty of time)
• Property address
• Loan amount
• Property value
• After-repair property value
• Interest Rate
• Loan Term
• Lien position (is there a 1st or 2nd position note)
• Brief project description
• Exit Strategy
• Message of Urgency & Scarcity (make sure lenders know this is a first-come, first-served opportunity)
• Call to action (be specific)

Breath, it all comes together on paper

All these details seem much less overwhelming and make much more sense on paper. That’s why I created the Private Loan Offering Template. It’s one cool tool that members of our Strategic Investors Insider Circle have access to. But I’m feeling generous today, so check out these 4 freebies. (You’re welcome!)

Remember to choose the communication method that will be most effective based on the criteria we just discussed. And if you decide to phone it in – don’t just plow through the lengthy list of details. Make sure you provide a brief but thorough explanation of each point, and be sure to invite questions from your lender throughout the conversation.

Keep it upbeat, make them excited, and close the deal!

Some final food for thought

When trying to secure a private lender, always have backups. Always have a prospect on deck.

If you’re first lender bails or their funds don’t clear (it happens), be ready with plan B. Remember, it can’t hurt to have your lender sign a Private Loan Offering, just to cover all the bases.

Verbal commitments are great, but written ones are solid. Let your other lenders know about the Private Loan Offering, and ask them if they’re cool with being the backup. There’s nothing wrong with a little upfront disclosure.

Your second tier lenders will appreciate your honesty and the chance to stay in the game, and that little selling tool called “scarcity” may get them salivating even more for your hot property.

Whatcha think?

How did this post sit with you? Did it makes sense? Got any more questions for me? Hit me up down below.