Private Money 101: A Crash Course in Private Money

Private_Money_101Before we dive right in, answer these questions for me …

= > “Are you frustrated because you can’t get your hands on the cash you need for your real estate deals?”

= > “Are you scared to make an offer for fear that it will get accepted?”

= > “Have you ever lost a great deal because you didn’t have cash to close it?”

= > “Is a lack of financing killing your real estate investing dreams?”

If you answered “yes,” to any of the questions above, then private money may be THE solution for you.

To find out, let’s take a quick crash course in private money … aka Private Money 101.

What is private money?

Private money is cash from an individual that is lent to you, the real estate investor, rather than being invested traditionally through stocks, bonds, mutual funds. When you think about private money, think investment funds from an individual … any individual.

Is private money the same as hard money?

Far from it!

Hard money lenders finance deals for real estate investors as a business. They lend to investors based on the property, not necessarily based on the person. The hard money lender dictates the terms of the deal to you, the investor.

A typical hard money loan has high interest, points, and is short term. For instance, I purchased my second deal with a hard money loan. I was charged 15% interest, five points (or 5% of the loan balance), and had a term of six months to repay the loan in full.

Do you see why they call it “hard” money?

On the other hand, with private money, you dictate the terms of the loan to your private money lender. Based on the deal and your business model, you offer terms that suit your needs and provide a good return for your private lender. A typical private money loan could have 6% to 10% interest, no points, and a term that suits your exit strategy.

What type of properties can you buy with private money?

The primary niche for my real estate investing business is single family homes. But, single family homes are not the only type of property you can buy with private money.

Trevor only buys apartment buildings. He has been investing for several years now and has accumulated a nice portfolio. Each property cash flows well, is managed by a professional property management company, and is in or near his local market.

And how do you think he finances every one of his purchases?

You guessed it … Private Money!

Any great real estate investing deal can be financed with private money; it doesn’t matter if it is a house, condo, townhouse, apartment building, skyscraper, or beach front home.

Do you have to do lender luncheons to get private money?

One of the popular methods taught to get private money is to host a lender luncheon. You would be required to rent a facility, advertise to fill the room, and you would present your private lending program in front of the audience. While I believe this to be a good strategy for some, hosting a lender luncheon is not a viable strategy for most.

Why you might ask?

The number one fear in our country is public speaking. And you know what is number two … death! Most people would rather die that speak in front of an audience. Even if it was easy to get private money by hosting a lender luncheon, the majority of people would not do it.

So the question still remains, “Are lender luncheons required to get private money?”

Luckily for you, the answer is “no.”

I actually found that it is easier to get private money by presenting your investment program to prospects one on one. Plus, you don’t have to spend money to rent a room at a restaurant or hotel, pay for marketing costs, deal with the anxiety of presenting in front of an audience, etc. etc.

What types of people are the best private money prospects?

The first type is people who know and trust you. This could be a family member, long time friend, neighbor, someone from church or school . . . really anyone that you have built a long term relationship with could be a good source for private money.

The second is people who know a good deal when they see one. Anyone who works in a field related to the real estate industry could fit in this category. Examples would be real estate agents, mortgage brokers, bankers, appraisers, home inspectors, attorneys, accountants.

And yet another type most likely to lend to you is the best source of all . . . people who know someone who has invested with you. Or, in other words, referrals! Once you get your private lender base established, ask them who they know that would also like to make a good solid rate of return backed by real estate.

Would my local real estate investing association (REIA) be a good place to find private money?

Yes, it would!

REIA meetings are filled with people who have heard real estate investing is lucrative, want to make money doing it, but do not have the time, energy, motivation, or know how to do it themselves. That’s where your private lending program comes in …

You offer a hands off real estate investment with a good return. Your private lender gets to “invest” in real estate without having to deal with the hassles that come with owning property like repairs, managing contractors, dealing with tenants, and other general property management duties. All they have to do is stroke you a check.

People who attend REIA meetings are already sold on real estate investing, all you have to do is sell them on lending against one of your deals.

How do you convince someone to lend you private money?

You don’t!

That is coming from the wrong mindset. You’re not out to “convince” anyone to lend money to you. Your goal is to educate people about your investment opportunities. If someone is interested, great. If someone is not, next.

Class adjourned. That’s it for your crash course, Private Money 101.

If you have any questions, comments, or additional tips, throw ’em in the comment area.

Happy Private Money Getting!

– Patrick & Trevor

Private Money Blueprint Results – Kimberly Francis Raises Over $100K

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Whoever says that getting private money isn’t easy … either doesn’t know what he or she is talking about or doesn’t know the simple techniques and strategies that work for easily getting private money …

I checked in with one of our students, Kimberly Francis, on Facebook to see how the Private Money Blueprint System was treating her and if she had any questions we could help her with … check out her response …


It’s really gratifying … I mean think about it, “If you were stuck, without a way to finance your deals, unable to capitalize on one of the greatest times to buy in our lifetimes, unable to achieve your real estate investing dreams … and everything changed for you … you invested in yourself, you invested in your education, and now you’re seeing results like these … over $100,000 in private money just a couple months after getting started … wouldn’t that feel incredible?”

It does for Kimberly, and Butch, and Tim, and Connie, and Victor, and Ann, and Ray, and Justin, and the list goes on and on …

If you want access to hundreds of thousands of dollars in private money to fund your deals, if you want to learn how to easily get private money for your deals, check out our private money getting system.

Oh yeah, we love connecting with our students … whether you’re already on the Private Money Blueprint Team or just loving all the killer free training that we offer … head over to Facebook and friend us up …

Here are our links:

Patrick’s Facebook

If you are one of the many Private Money Blueprint students who are rocking it and getting tons of private money, send us your success story … we LOVE hearing from you all 🙂

– Patrick

Best Course Ever? – See What Nic Thompson Says…

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Patrick and I really take pride in the PMBP program… and didn’t just throw it together in a day.  It was a 5 month process putting everything we know into a full A-Z program… and we love it when we get emails like this… like the one from Nic Thompson.

Check it out…
(click the picture of Nics email he sent us to see the full size image)


>>> Curious To See Why Nic Thinks It’s
“The Best Course Ever”? Check It Out…<<<

Private Money Case Study – Brian Gets Committment For $150,000

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Another cool note from a happy PMPB student.

Brian has been a student at PMBP since summer of ’09… and he let Patrick know through his blog that he just locked up $150,000 (which will turn into $500,000 after the first deal) in private money to do his real estate deals.

Check it out…


>>> Click Here To Get The Same Tools And
Personal Guidance Brian Got <<<

How to Explain the “Worst Case Scenario” to a Private Money Lending Prospect

What do you say to a private money lending prospect when they ask you the dreaded … “Worst Case Scenario Question” …

This is one of those questions that comes up practically EVERY TIME you present your private lending program.

One of our students, Jose, recently had this exact question and wanted to know how to navigate this touchy subject without scaring them off … check out his email to us below …


Great question Jose … we get this one all the time …

What you say to answer this question, AND how you say it could easily make or break the deal … heck, where you answer this question could easily make or break the deal (as a Private Money Blueprint student, you know exactly what I’m talking about, don’t you?).

Check out the video below … I not only tell you exaclty what to say and how to say it, I also let you in on where to answer this type of question (most investors get this all wrong) …

Leave your questions, comments, tips below …

– Patrick & Trevor

Private Money Blueprint Results – Luis Larotta Gets $600k – $1million Committment

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One of our PMBP students Luis Larotta from California is one of those students who is awesome… because he isn’t shy to get a hold of Patrick or I anytime he has a question (and we’re always here to help him… and any of our students any way we can).

So, we helped him a bit to tweak his Private Lender Powerpoint by adding in some “closers”… some important “question patterns” that help to close the prospect early on, etc.

Well… check out his results (and who he got his first private money committment from). Now he can do deals and make offers with confidence knowing that he has the money “in his back pocket”… without bank hassles… without a credit check… without upfront points or fees… etc.

Check out his email to us…


Use Luis’ Advice Above… and Check Out The Same System He Tapped Into To Get These Kind Of Results. Click Here <<<

SEC Attorney Spills The Beans Detailed Interview

In this members-only webinar workshop Patrick is joined by one of the West coasts top SEC attorneys Jillian Sidoti, to discuss how to safely and legally raise capital for your real estate investing projects.

Jillian specializes in transactional legal matters such as private placement memorandum, regulation D filing, trademark and copyright issues, and other contractual matters.

Beginning with an overview of securities laws, Jillian also discusses how to properly structure your real estate company, an overview of Regulation D, and documents you’ll need for your investing deals.

Stay tuned to the very end for the Q&A session 🙂

NOTE: This is a large video. If you’re having troubles viewing this video you can download this FLV video player here << . Then you can download the FLV file of this video here <<.  It is a large file (70mb+) so it will take a little while to download depending on your internet connection speed and computer speed. The file is an FLV format and must be played through an FLV player such as the free one in the link above.

This Makes Pat and I Blush… (In a good way :-)

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I won’t say a whole lot about this… just read it and smile 🙂  That’s what Pat and I are all about… we love to give and help people… and those who want to accept it from us… they reap big time rewards like Rick below did.

Check out the email from Rick…


>>> Join The PMBP Family… Boost Your Real
Estate Business Profits…<<<

Step By Step Fractionalized Trust Deed – Susan Lassiter Lyons

Hey guys and gals!

We were getting a bunch of questions from PMBP students who asked for more clarification on fractionalized trust deeds from Susan.  Well… we asked Susan to do a workshop on it for our PMBP members (she also shared it w/ her mastermind group)… so get out your pen and pad if you’re to a point where you’re ready and need to use fractionalized trust deeds.

NOTE: If you’re not to a point in your REI biz where you NEED fractionalized trust deeds RIGHT NOW… I’d skip this and come back to it only when you’re ready.  Make a shift from “just in case” learning to “just in time learning”.  Learn only what you need to know to get you to the very next step… don’t learn just because you think you may need to use it someday… thats a trap that unsuccessful people fall into.

Justin Wilmot Case Study: How He Got $1,000,000 In Private Money From One Private Lender

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Patrick and I are constantly talking with our students and fellow investors every day and we have at least one student a day give us a call and ask questions and tell us their success stories.

Well, just a few weeks ago Patrick got a call from Justin Wilmot, a “surfer dude” student from Florida who Patrick walked through step by step on how to get private money in today’s market just a couple months back.

His Private Money Results?

Well… check out the case study audio below for specifics… but I can tell you he secured 7 figures from just 1 private lender (he says how he did it in the mp3 below).

Click here to play the mp3 case study with Justin <<

The mp3 will open in a new window

To Sum It Up

  • Justin is a self-proclaimed “surfer dude” from Florida who wanted to “get involved in real estate”
  • Tried making offers and without cash kept getting rejected time and time again (and banks wouldn’t lend him the money)
  • Hooked up with Patrick in early this year and Patrick taught him his little simple system on how he’s been able to get private money. Justin implemented what Patrick told him to do and what to say (exact scripts and templates)
  • Justin just got a commitment from one private lender of $1,000,000 as a line of credit that Justin can now use to make cash offers on properties with confidence.
  • Now Justin will close more deals because of the cash he now has available to him (at great terms… and Justin never had to show his credit score, sign an application… none of that)… and more deals will mean A LOT more money in his pocket this year and beyond.

Congrats Justin!

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