Are You Making These Common Private Money Getting Mistakes?

Hopefully, you either haven’t yet made or never will make these private money getting mistakes.

One of the best ways to learn something new, is to learn what NOT to do. In this instance, mistakes to avoid.

Learn from these common private money getting mistakes so that you get private money for your deals safer, easier, and faster.

3 Private Money Getting Mistakes You Must Avoid

1) Advertising Directly for Investors Without Registering with the SEC

Here’s an example of how NOT to advertise to get private money:

Investors Wanted!

10% Returns Backed By Real Estate

Guaranteed!

Contact us at xxx-xxxx

If you were to run an ad like this in your local newspaper, that would be considered a general solicitation. And without registering with the SEC, that could land you in some big time trouble.

Here are a couple tips …

Never, and I mean never, say that an investment is guaranteed. That could get you in major hot water with the SEC … not where you want to be. Like Benjamin Franklin said, “Nothing is certain but death and taxes.”

I recommend that your primary strategy for finding private money leads is to network at REIA meetings, chamber of commerce, rotary, small business associations, BNI, and other similar organizations.

But, for those of you who still want to advertise, here’s how to structure your ad so that you stay SEC compliant.

Position your ad as if you’re teaching how to become a private lender rather than directly offering an investment. For instance …

Learn How to Make Great Returns

Backed by Real Estate

Contact us at xxx-xxxx

That would not be considered a general solicitation.

2) Presenting a Specific Deal During the First Appointment

The private money getting process we teach our Private Money Blueprint students entails getting a prospect into a formal appointment and presenting your private lender PowerPoint presentation.

During the presentation, rather than presenting a specific deal, go over general terms for your private lending program.

You see, it’s much easier for someone to object to a characteristic of a specific deal than to an ongoing investment program.

If you present a deal at this point, your prospect may not have the required funds, may not like the property, may not be able to meet the time frame needed to fund the deal.

However, once you sell someone on your investment program and you find out exactly what range of funds they have, time frame available, expectations from a good investment opportunity, etc., you can transition to passing specific deals by him or her; deals that match the information you already elicited.

3) Telling Instead of Selling

To get private money, it’s not about you telling a prospect about you, about your company, about your real estate investing strategy, about your private lending program.

True, that’s part of it. But only part.

You’re selling an idea; an idea of how to make a good return on investment dollars. And the best way to sell that idea, believe it or not, is by asking good questions; the type of questions that elicit information about your prospect’s pains and goals.

Here are some good examples of questions to ask when borrowing private money.

Making mistakes in the private money game can cost you dearly. By steering clear of these 3 common mistakes, you’ll be on your way to getting private money safer, easier, and faster …

Happy Private Money Getting!

If you guys and gals have any questions, put ’em in the comment area.

– Patrick & Trevor

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.