12 Powerful Tips to Getting Private Money

What would your real estate investing business look like if you had an unlimited source of capital to fund your deals? Let’s just say you had access to a million bucks in private money at your disposal . . . what kind of profits could you turn that into by doing great real estate deals? How would that affect your lifestyle?

Well, that’s a reality now for one of our students (and this kid is in his mid twenties). He just locked up access to a million dollar credit line from a private investor and is about to go gangbusters in his market down in Florida.

Anyway, let’s dive right in and get to the meat and potatoes . . . because that could be you! You can have access to all the cash you want and need for your real estate deals . . .

12 Powerful Tips to Getting Private Money

1) It’s Easy to Get

I recruited my first private money lender when I was 22 years old . . . and if you’ve ever seen a picture of me, you know that I look young for my age. Soooooo, when I signed up numero uno, I looked like I was 17.

People talk about getting private money like there’s a big mystery behind it and say, “Everyone that I talk to wants to hold on to their money right now and is worried about the real estate market.”

That may be someone’s conditioned response but when you educate them on the process, how it works, why it makes sense, and you ask them good questions to elicit their needs and goals, the investment opportunity sells itself.

Come on guys . . . if a 20 something college drop out that looks like a teenager can do it, you can too!

2) Private Money Is All About Personal Relationships

By personal relationships, I mean relationships that YOU build in order to get private money. I often times get asked what one of my private lenders would charge to finance a deal. And I have to tell them, that’s not what it’s all about.

Get out there, spread the word that you’re a real estate investor, that you have great investment opportunities, and cultivate rock solid personal relationships.

3) No Credit . . . No Problem

Private money loans are based on the property, not the person. When you have a great deal under contract . . . let’s say for $120K that’s worth $180K . . . the person that lends you the money is doing so based on you buying the property far under value.

4) Virtually Unlimited Quantity

A private lender is just an everyday person who lends money to you as an investment rather than investing the traditional way through CDs, mutual funds, stocks, and bonds.

Anyone that you know and everyone that you meet is a potential source of private money. Most people, especially in today’s market, are looking for good opportunities to invest.

You’ll never run out of private money prospects for your real estate investing needs.

5) Process of Harvesting Funds

Check out the article 4 Steps to Harvesting Private Money for Your Deals. It breaks down the process to … till the soil, plant seeds, nourish your field, and harvest the crop.

6) Go for the Formal Appointment

This is one of the vital pieces to the private money getting puzzle. Investing in anything is a serious matter and should be treated as such. Once you pique someone’s interest with your 30 second commercial, you go for the formal appointment.

This is where you meet with all decision makers to present your investment program and educate each prospect on your business model and how it relates to today’s market.

7) Use a Professional Presentation

The presentation that you present to your private money prospects should be professional and specifically crafted for optimal success. If you don’t already have one, you can download the private lender PowerPoint presentation that I cultivated over the years.

There’s a script included to show you exactly what to say and how to say it as well. Also, I’ve studied sales extensively and integrated an advanced sales process into the presentation. It’s some pretty powerful stuff . . . enjoy!

8 ) Make Your List

Here’s your first action step . . .

Now, this is a brainstorming session. Which means, do not attempt to qualify your answers . . . just write down what comes to mind. One of the biggest mistakes I see people make time and time again is to disqualify people.

I want you to write down the first five people that come to mind that you could set up an appointment to present your investment program. DO IT NOW!

If you are already reading this sentence, you didn’t listen to me. Please stop reading this and write down five people.

OK, now write the date by which you will have called them to set up your first private money presentations.

By committing to following through on this action step, you are on your way towards getting your next deal financed with private money.

9) Listen to Henry Ford

I thought I would bring in the wisdom of Mr. Henry Ford to help us out a little bit . . .

“If you think you can do a thing or think you can’t do a thing, you’re right.”

This is powerful advice! Your expectations will play a major role in your success or failure at getting private money. The simple fact that there are thousands of investors all across the country that use private money to finance their real estate deals should be proof enough that you can do it too . . . regardless of age, race, your network, your net worth, or any other excuse you may come up with.

10) Follow Up Until They Buy or Die

The key to my success over the years at building my base of private lenders was aggressively following up with people (after I had shown them the PowerPoint presentation) until they lent me money on a deal or told me to get lost . . . and the latter never happened.

After you formally present to someone, you will have gathered some much needed information from your prospect about their needs and goals. Now as you follow up with them, only present deals that match the criteria that you gathered at your meeting.

And use my philosophy when you need to get a deal financed . . . “Ask until.”

11) Where to Find Private Money Prospects

One of the best places to find potential private lenders is at your local real estate investment club meeting. Often times, these meetings are filled with people who have heard real estate investing is lucrative and want a piece of the action but don’t really want to go through the process of learning how to do it themselves . . . that’s where you come in!!

Educate them on how they can get involved investing in real estate without having to do anything other than writing a check.

Also, check out this article on the 4 Types of People Most Likely to Lend You Private Money.

12) Business Card Reversal Trick

This is where you use the back of your card for a marketing message that piques someone’s interest in your investment program without you having to bring it up in the first place.

Here’s what you do . . . on the back of your business card, have a phrase like, “Learn How to Make High Returns Backed By Real Estate! Email at _____ For More Info …”

Now, when you hand out your business card, you’ll have people ask you what this means. Instead of you just telling people about your investment program, people are asking you about it . . . which is where you want to be.

– Patrick & Trevor

P.S. – Here’s a great free resource for you that we found that will save you a ton of time in looking for great real estate resources online.   We thought you’d enjoy it so we’re passing it along for you.

How to Get Private Money at Your Local REIA Group

Got a question from one of our private money students recently and wanted to share it with you …

Great question, Gene …

At my local REIA (real estate investment association) meeting, the group leader always asks if anyone has a deal they want to pass by the group … what a GREAT opportunity to present your deal to potential private money prospects.

For those of you that don’t already know, I’ve turned tons of people that I’ve met at my local REIA group into my private money lenders … even ones that are active investors themselves.

Check out the video below for a complete script of what to say (even if your REIA group doesn’t give you a chance to pitch a deal during the meeting, the script can be crafted to a single person or small group).

Soooooo, when you need to get a deal funded ASAP, here’s what you say …

I thought I’d make it really easy for you and type out the meat and potatoes from the video for you as well …

4 Fundamental Elements When Presenting for Private Money to Your REIA

1. Paint the Big Picture
2. WIIFT (if you don’t know what that stands for, guess you have to watch the video 🙂
3. Promote Scarcity
4. Disqualify Them

**Private Money Power Script**

WARNING: When using this alluring script, you may have to break up a fight … a fight between everyone who wants to fund your deal!

————————————————————

“We have an excellent deal under contract … a 52 unit building that we’ll be closing in the next <X> days. We’ve already done our homework and KNOW that this deal is rock solid.

Now, this opportunity isn’t for everyone … but there is a chance for one lucky individual to jump on board with us and make a great return. We’re bringing in a private investor for $ <X> Dollars to provide the cash needed to do the deal.

This person will … simply by writing a check … make a great safe return on their investment dollars … not have to deal with the hassle of owning and managing real estate … not have to deal with contractors or tenants … (because we do EVERYTHING for you) … not have to spend an ounce of their time … and still receive all the excellent benefits that real estate investing has to offer.

As you can imagine, this opportunity will not last long … they NEVER do … because we’ll have a private investor committed to fund this deal by next <X>.

Soooooo, if you want to jump on this opportunity before it’s gone, write the best time for me to call you on your business card and get it to me before I leave tonight.

Thanks and again … we know that this ISN’T for everyone … just those looking for a easy, hands off, safe, excellent return backed by real estate.”

————————————————————

The primary way we teach to get private money isn’t to “pitch” a deal to a prospect first … it’s to pique a person’s interest and get them into a formal appointment. BUT, if you have the opportunity to present a deal to an entire room of real estate investors … DO IT! And, this script can come in handy when you’re under the gun to close fast.

Not sure if Gene already has his deal funded so if anyone wants to hear more about his private money opportunity, throw a comment below, and we’ll hook you guys up.

– Patrick & Trevor

4 Types of People Most Likely to Lend You Private Money

1. People That Know and Trust You

Credibility that you’ve cultivated through personal relationships is the best place to start when seeking private investors for your real estate deals.

Friends, family, neighbors, work colleagues, people from church, or really anyone that you have built a long term relationship with are good potential prospects. These are the people that regardless of whether or not they have interest or have available funds to invest will be glad to hear you out and give you constructive feedback.

And don’t be too quick to judge someone’s ability to invest with you. That will cost you big if you do. Set up the appointment and present your investment program. Even if they never invest with you, you got some practice presenting to them, you planted another seed, and they may refer someone to you that does have the interest and available funds to get started in your program today.

2. People That Know a Good Deal When They See One

OK, who would fall into this category? . . . anyone that is a real estate related industry will most likely know a good deal when they see one. Seek to network with real estate agents, mortgage brokers, appraisers, attorneys, accountants, home inspectors, bankers, title researchers, other real estate investors, etc.

If you contract a killer deal and show someone that knows what they’re looking at, it’s only a matter of time before you have it financed.

Practice your 30 second commercial, set up the formal appointment, and present your private lending program.

3. People That Know People That Have Invested With You

Yes, I’m talking about referrals. These people have already been presold by someone else that has experience investing with you. Nothing more powerful than that!

Once you sign up a couple private lenders on your team, ask them who they know that may be interested in the program. You can also offer a referral fee or “marketing” fee to get people excited about referring others.

4) People that Are Self Employed or Own businesses

Many of my private lenders are in commission based jobs where they get paid based on results or own businesses themselves.

These people are not afraid to take risks, don’t rely on other people to do everything for them (like making investment decisions), and are actively on the look out for that next opportunity.

And best of all, these are typically the kind of people that are at all the networking events around town. People that know that the harder they work, the bigger network they create, the more oppotunities that they take advantage of . . . the faster they are going to achieve their dreams and be where they want to be.

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