Would it make a difference in your real estate investing business if you had an unlimited source of capital to fund your deals? Let’s just say you had access to a million dollars 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?

That’s now a reality for one of our students that joined our creative real estate investing coaching program a couple months back. 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 just as easily have been you! You can have access to all the cash you need for your real estate deals . . .

12 Must Know 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) 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 and that you have investment opportunities for the right person, 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 so 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, even in today’s market, are looking for good opportunities to invest. You’ll never run out of prospects for your real estate investing needs.

5)Process of Harvesting Funds

I wrote an article recently, How to Get Private Lenders Beating Down Your Door, which outlines the process of getting private money.

I break it down into 4 steps . . . till the soil, plant seeds, nourish the 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 networth, or whatever 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 that have heard real estate investing was 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 3 Types of People Most Likely to Invest with You.

12) Business Card Reversal Trick

This is where you use the back of your card for a marketing message that piques someone’s interest but doesn’t tell them any details. And, it reverses the process of spreading the word about your private money program.

Here’s what you do . . . on the back of your business card, have the phrase, “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.

For more on getting private money, check out the 8 Borrow Private Money Do’s and Don’ts.

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Financing really seems to be a sticking point for many investors. We get tons of questions through the blog about financing strategies, but most of the questions center around getting private money.

Recently, I wrote an article about the 3 types of people most likely to invest with you and become your private lenders. Now that you know who you’re best private money prospects are, let’s go over exactly what you should be asking them.

The best way to turn a private money prospect into a client is by asking the right questions. Questions that elicit motivation, questions that uncover goals, and questions that make the prospect imagine themselves enjoying and benefiting from your investment program.

5 Questions You Should Be Asking Your Private Money Prospects

Here’s a quick tip: Make sure to write down everything an investor tells you when you’re going through these questions. This is valuable info!

1) What experience do you have investing?

Find out if they’ve invested in CDs, mutual funds, bonds, stocks, real estate . . . whatever. This will help you get a good picture of the type of investor you’re dealing with, their expectations, how knowledgeable they are with investments, etc.

If they have any experience investing in real estate, you want to know the details. What did they like? What did they dislike?

The prospect’s answer will indicate whether they primarily move away from pain (losing money or earning meager returns) or towards pleasure (making more money/better returns/financial freedom). Note whether they move away from pain or towards pleasure. You will present your investment opportunity to them based on this information.

2) Are you happy with the performance of your investments (investment portfolio)?

Whether they are happy with it or not, you ask the same question next . . . “What average rate of return have you been getting from your investments?”

At this point, if they tell you a 20% annualized return, you can let them know it was nice talking with them and move onto the next prospect. You just saved yourself some time.

Let’s say the prospect said he or she was earning a 6% return on x-investment. At the end of your presentation, you could say something like, “Well, I’m not sure if we can do this or not but . . . what if we could offer you a 8% annualized return backed by real estate . . . would that be something that might work for you?”

3) Whether or not our program is a fit, is it important that you find the right investment opportunity soon?

If they say “no,” this may be a good person to add to your follow up list. You could also say something like this to them, “Sooooo if the money stayed in x-investment earning x% for say another 6 to 12 months, you would be fine with that?” Or, “If your money just sits there earning you nothing for x-time, you’re ok with that?”

If they say that it is important to find an investment soon, you have a green light to continue moving forward towards turning them into a private lender.

4) Are you more interested in making a quick buck or building wealth?

This is another way of asking if the prospect is interested in a short or long term investment. We would prefer that the person invest long term. So by saying “quick buck,” we’re already putting a negative connotation around that idea. The longer term you can negotiate, the better.

If you find out that the prospect just wants to make a quick buck, it may be best to move on.

5) What would the right investment provide for you?

This question is key to get the prospect visualizing a positive experience with your investment opportunity. And we’re not even referencing our investment. They will imagine being able to retire one day, going on that family vacation, feeling safe and secure and will associate it with your investment program.

Remember, no one will invest with you until they can imagine themselves getting the benefits from it.

Free Private Money Resources

The above questions all came out of the free “How to Recruit Private Money Millions” eBook and PowerPoint presentation. These resources walk you through exactly what to say when meeting with private money prospects and gives you a customizable presentation that you can use immediately. There’s a lot more too it than just these 5 questions . . .

Click Here to Get Your Free Private Money eBook and PowerPoint Presentation

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