Must Know Investing» private lending

How to Turn Wannabe Real Estate Investors Into Private Money Lenders

Patrick Riddle — Mon, 12 Oct 2009 21:39:28 +0000

Have you been to your local REIA (real estate investment association) meeting before? If so, how many of those people do you think are actually investing?

I’ve found that typically, the room is split 70/30 …

70 percent (and sometimes even as high as 80% or more ) are wannabe real estate investors … they’ve never done a deal and probably never will … and ONLY …

30 percent are active investors …

What is it that you, an active or soon to be active real estate investor, could offer to these wannabe investors?

If you said, “An easy hands-off real estate investing opportunity … an opportunity where you don’t have to deal with contractors, the headaches of property management, leaky roofs, clogged toilets, the hassles that can come with home ownership … and all you have to do is stroke a check …”

… then you understand what I’m talking about!!

You see … wannabe real estate investors are perfect prospects for private money. They’re already sold on real estate investing, they’re already seeking a way to make money in real estate … all you have to do is show them how they can become a real estate investor by simply lending you money.

Here’s a question we recently got from one of our Private Money Blueprint students on the subject …

Great question Mike!

Check out the video below …

How to Get Private Money from Wannabe Real Estate Investors

Interested in a SYSTEM that walks you step by step … a detailed blueprint that shows you EXACTLY how to easily get private money for your real estate deals?

Click Here if YOU WANT Private Money Lenders Beating Down Your Door

How to Become a CIA: (Part 4) 37 Must Know Tips to Getting Private Money Easily

Patrick Riddle — Wed, 30 Sep 2009 14:45:04 +0000

Welcome … to Part 4 of the “How to Become a CIA” creative real estate investing series … 37 Must Know Tips to Getting Private Money Easily …

(if you’re new to the series, you may want to start with the introduction)

This week, I’m gonna teach you how to easily get private money for your real estate deals.

Maybe you’re not sure if private money is really right for you … if that’s the case, answer the following questions …

“Have you ever lost an incredible deal because you didn’t have cash to close it?”

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

“Want to do short sales or REOs … but don’t have the financing lined up to do so?”

“Do you agree that now is the time to buy but have no means to close deals today?”

If you can relate to any of the above problems, private money just may be the solution you’ve been looking for. Before we get to the meat of today’s lesson though … the 37 must know tips to getting private money easily … let’s make sure we’re all on the same page …

What is Private Money?

It’s very simple … private money is cash (investment funds) from an individual that they lend to you, the real estate investor, as an investment rather than investing traditionally through stocks, bonds, CDs, or mutual funds.

That’s it!

Soooo, any individual that you know and every individual that you meet from now to eternity are potential private money lenders. Rather than investing traditionally, they invest through your private lending program.

Why Would Someone Lend Private Money?

Tons of people have suffered massive losses in the stock market and are sick and tired of their meager returns in CDs, mutual funds, and bonds. There is a tremendous need for a good place to put investment capital these days.

That’s where your private lending program comes in …

Real estate can be purchased today at rock bottom prices. And when you have private money (aka CASH) to go make offers and close great deals, you can create a win-win-win for all parties related to each transaction. The seller gets a fast cash offer, the private money lender makes a good return, and you make all the profit in the deal.

… and without further ado …

37 Must Know Tips to Getting Private Money Easily

Here we go guys and gals … get ready for some heat!

I had to cut this week’s video into two parts … YouTube only allows videos that are less than 10 minutes, and I couldn’t figure out a way to deliver all of this content in that time frame … so there are two videos for your viewing pleasure below …

Check ‘em out!

So what do you think so far? Pretty good stuff ehhhhh?

… alright and now for your private money tips 13 to 37 …

The time has come for me to roll the ball back in your court … time for you to TAKE MASSIVE ACTION … (see below)

“How to Become a CIA” Action List

1. Download your free copy of my “How to Recruit Private Money Millions” eBook and private lender PowerPoint.

This is the same presentation that I’ve used to get millions in private money … it’s fully customizable and ready for use whenever you are …

2. Set the deadline for your first (or your next) private money formal appointment. Write it down right now!

I suggest the deadline be no more than 14 days from now … I’ve given you the information … I’ve given you the tools … what are you waiting for?

3. Many of you know about my Private Money Blueprint home study course … the step by step system that myself and Trevor Mauch designed to help walk people through the steps to getting massive amounts of private money … well, for those of you that want to take the easy way to private money millions … click here to learn more about our private money getting system …

It’s definitely not for everybody … but it’s worked out great for many of our students across that country that no longer have financing worries … also, we’ve even set things up so that you can get a fully search engine optimized, customizable, private money lead generation website …

Wouldn’t it be awesome to have private money leads flowing right to your inbox?

Click here to learn more

4. And last but not least … Comment below with your questions, thoughts, and tips!

Hope y’all enjoyed the 37 must know private money tips and resources …

Here are the links to the rest of the series . . .

How to Squash this Common Private Money Getting Objection

Patrick Riddle — Fri, 25 Sep 2009 19:25:42 +0000

(this is an article/video that I put together for our Private Money Blueprint students … I decided to share this with ya’ll since we covered private money in Part 4 of the “How to Become a CIA” creative real estate investing series … enjoy!)

When getting started with private money, what if one of your private money prospects asks you …

“Have you done this with other lenders? If so, could you give me a few names that I could contact?”

How would you respond to that? What would you say?

If you’re like most, you’d probably end up looking a lot like this monkey … fumble on your words … stutter a little bit … and leave your prospect with a not-so-good feeling about you and your investment program …

BUT, have no fear … Patrick’s Here!

… lol … ok, maybe that was a little much … but really …

One of our students asked this question recently so I shot a quick video teaching you exactly what I’d say to handle the prospect’s true concern … their comfort level investing with you …

Click the video below to watch now!

(if reading in your email subscription, click here to watch the video)

My advice to you would be to study the script in the video so that you’ll be ready to fire when a prospect asks you this one …

Let me know how I can help you guys out … put your thoughts, questions, and whatever else is on your mind in the comment area below …

(you gotta check out this email I got last week from one of my students … From Spinning His Wheels to Closing Big Deals … how motivating is that!!)

12 Must Know Tips to Getting Private Money

Patrick Riddle — Fri, 24 Apr 2009 13:31:21 +0000

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.

How to Get Around Lack of Experience and Credibility

Patrick Riddle — Tue, 21 Apr 2009 12:03:40 +0000

This is something that every real estate investor faces when getting started . . .

“How do I get around a lack of credibility when talking to sellers if I’ve never purchased an investment property? What do I say when someone asks me about my experience . . . or lack thereof? How should I go about getting private money to finance my deals without a proven track record? HELP!!!!”

Ok . . . calm down . . . every real estate investor has gotten past these seeming roadblocks to success. Keyword in the last sentence “seeming.” The lack of experience and credibility factor is much more of a mental obstacle than anything. But let’s break down the common areas where your lack of experience and credibility may be questioned and give you a structure to over this objection.

How to Get Around Lack of Experience and Credibility with . . .

Sellers

When you get the question, “How long have you been doing this?” or something similar that questions your ability to purchase their property . . . say . . .

“Good question. I’m newer to real estate investing and have a mentor who has been in the business for many years. I’ve always been the type of person that values experience . . . I guess just like you . . . I’m not sure if we would be interested in your house or not though . . . not sure if it would qualify for our program. ” Then, start asking them questions again.

You’ve accomplished a few things here. You’ve acknowledged that the seller asked you a “good” question (makes them feel important), you’ve leveraged someone else’s experience (you can use me as your mentor, I’ll be happy to answer any questions you have . . . send your questions here), you’ve said that you’re just like them, and you’ve put yourself in the reluctant role, which is always where you want to be, by telling them their house may not qualify for purchase . . .

You could also change “I’m newer to real estate investing” to “The company that I work with is newer . . .” so that you take yourself out of the decision making role. This is a powerful negotiating strategy!

As soon as you answer their question, get back to what’s important . . . which is asking THEM questions. Here’s a list of questions you should be asking sellers.

Lenders

Let’s talk about how to deal with this obstacle when working with private money lenders and hard money lenders.

First off, realize that when dealing with these potential lenders, it should always be about the deal . . . not you personally. Soooo, when your experience gets questioned, let them know that you’re a newer investor and have a mentor that’s been in the business for many years. Once you’ve educated them on your business model (hard money lenders already know all about it), present deals that match their comfort level.

Hard money lenders may ask you about your experience level, but they lend money because you’re buying property far below value . . . not because you’ve been in the business of buying houses for 10 years and have a 750 credit score. Just make sure to find out how their lending program works . . . what types of properties, price range, areas, what they require to consider a loan (appraisal, title report, inspection, loan to value, etc.). Make sure to provide them everything they ask for when presenting a deal.

With private money prospects, just focus on the fact that you’re buying property at a very low loan to value and that they’re lending based on it being a great deal. Once you explain your busniess model, how they fit as an investor in the process, and have asked them questions about their needs and goals . . . present deals to them that match the information you elicit.

Also, the more you follow up with these prospects over time and present deals to them, the more credibility and rapport you will establish with them.

For more info on the whole process of getting private money, read How to Get Private Money Lenders Beating Down Your Door.

Yourself

Yes, we need to get you past your own mental roadblocks as well. Remember, everyone starts at ground zero, and there are tons of real estate investors all across the country that have overcome the “lack of experience and credibility” obstacle to go on to build massive fortunes in real estate. Therefore, You Can Too!

There are both motivated sellers and willing lenders out there right now that need your help . . . regardless of where you are today.

Get out there, take action, and before you know it, you’ll have experience and credibility. But until then, leverage your mentor’s when you need it. I’m here for you . . . let me know how I can help.

4th Type of Person Most Likely to Be a Private Lender

Patrick Riddle — Fri, 10 Apr 2009 16:05:15 +0000

In a previous article, I discussed the . . .

3 Types of People Most Likely to Invest with You

1) People that know and trust you

These are your long term relationships . . . friends, family, etc.

2) People that know a good deal when they see one

Could be anyone whose profession is related to the real estate industry . . . real estate agents, mortgage brokers, home inspectors, appraisers, etc.

3) People that know people who have given you private money

This one is pretty simple . . . referrals. This is your best source once you get people in your program that have benefited from being a private lender.

For more info, read the full article, 3 Types of People Most Likely to Invest with You.

And now for the . . .

4th Type of Person Most Likely to Give You Private Money

When I started combing through my list of private lenders that I’ve cultivated over the years, I started to see another pattern. Another type of individual that’s a good prospect for becoming a private lender.

4) People that are self employed or own businesses

. . . and you know what, it makes perfect sense!

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 opportunities that they take advantage of . . . the faster they are going to achieve their dreams and be where they want to be.

And you, by providing great investment opportunities, can help them do just that!

Now it’s time to take action! Join a couple local clubs, assocations, groups and start networking your way to private money success!

How to Get Private Money for Your Real Estate Deals

Patrick Riddle — Mon, 09 Mar 2009 13:53:43 +0000

I get more questions about financing deals in today’s market than anything else. And specifically about getting private money . . .

Here are a some of the private money questions that I’ve received lately:

“Can you show me some of the paperwork from a sample loan?”

“If you have collateralized a property with an investor and you sell it, do you have to pay off the investor at that point? Can you hold the funds for a certain time period to try to get more property to assign as collateral?”

“Can you suggest where to find some legit private money lenders? The ones I’ve contacted wanted $250.00 non refundable just to present the project with no guarantee of getting the funds . . .”

“What do you advise are the best avenues to solicit private money?”

“Can I use your information to apply to investors that I need to invest in apartment buildings with me?”

All of these questions and MUCH more have been answered through the free getting private money resources that we have provided here on the blog.

Check out the video below to find out more . . .

This video clip is only a small segment of our 2 1/2 hour Creative Real Estate Solutions in Today’s Market Video Series. To get the entire video series, Click Here.

Also, check out the article on the 8 do’s and don’ts when seeking private money to borrow.

As always, I’m here to help. If you have any questions, Ask the Expert.

3 Types of People Most Likely to Invest with You

Patrick Riddle — Thu, 04 Dec 2008 15:55:55 +0000

Due to the results of the most recent poll on the blog, I wanted to write a quick post on financing strategies.

In today’s market, it seems like every investor is searching for creative financing solutions. Most traditional means and methods that investors have used to close deals have all but disappeared. Which leads us to a question that I am hearing more and more . . .

“What’s the best financing strategy to take advantage of the HUGE opportunity in today’s real estate market?”

If you were following along on the blog about a month ago, you know that we are big proponents to the power of using private investors. We did an entire video series on how to get private money. Below is a breakdown on who you should approach to become one of your private lenders.

3 Types of People Most Likely to Invest with You

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 (which I covered in video 3 of the getting private money video series), set up the formal appointment, and present your program or investment opportunity.

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 get your first couple private investors, ask them who they know that may be interested in the program. You can also offer a referral fee for anyone that they refer to you.