How to Find Private Money

If you’re struggling from a lack of cash and it’s keeping you from buying houses... here’s a solution for you…

Raising and using private money can help you enjoy more profits in a slow, normal, hot or post-hot real estate market. I want to help you start buying more, holding more and flipping more houses... all without ever using any of your own cash or credit.

Many cities and counties across the nation have recently shifted from a hot or normal market to a more challenging slow or post-hot market, some are still recovering, and others are just getting back into a “normal” market.

If you're having any trouble collecting cash when you buy, collecting positive cash flow each month or building long term wealth by capturing lots of equity, this article will give you the competitive and strategic advantage you want and need to achieve your financial goals as a creative real estate investor.

I work one-on-one with hundreds of real estate investors each month. One of the keys to some of our most profitable strategies (that are working best right now) is finding, nurturing and using private investors as part of your house buying operation.

The benefits of developing your private lender program and lining up dozens of investors eager to give you cash are substantial and significant:

• First, you can begin buying more houses for 'all cash' at significant discounts... up to 50% off retail value.

• Second, you can structure offers on houses that have a lot of equity... receiving $20,000 or more of your profits in advance... in cash... on the day you buy... even if you plan on holding the property for many years.

• Next, you can get back all the cash it takes to find, fix and occupy a deal so none of your money or credit is tied up in a house... allowing you to collect dozens (or hundreds) of 'free houses' each year for long term wealth accumulation.

• Finally, you can turn many non-deals with no equity into super profitable deals with substantial equity by paying off existing debt at a discount... using private money.

Here are the steps to systematically raising private money:

1) Create your “program” so you can explain it to others

2) Write your 60-second ‘elevator’ speech

3) Build your info/credibility kit

4) Create your presentation

5) Flap your lips to everyone you know

6) Follow up on your leads

Understand a lot of people that you come in contact have idle cash savings or retirement funds that are experiencing little or no growth. Offering more than double normal returns secured by local real estate is a great opportunity for them. Your private investors can enjoy higher profits … thanks to you. And you can make for money, thanks to them.

It’s quite simple…

1) Create your “program” so you can explain it to others

To get started ask yourself the following questions on what your program will look like:

• Will you pay simple interest or compounded interest?
• Will you pay a higher interest for no monthly payments?
• Will you do second liens, and if so, will you pay a higher rate?
• Do you ever want to make quarterly or annual payments instead of monthly?
• What day of the month will you pay all your notes?
• What is your minimum investment?
• How will you handle a lender’s request for early pay off?
• How quickly can you respond to such a request?
• Will you offer a minimum earned interest or prepayment penalty?
• When will interest begin?
• What will you do if you need two lenders on one deal?

2) Write your 60-second ‘elevator’ speech

How can you quickly grab someone’s attention and peak their interest about your private lender program? What do you say to someone you know or meet? Review this example and then develop you own, brief script. Then practice it.

Example:

“I’m a professional buyer of single family homes throughout <area>. I buy and fix up houses and can offer my sellers all cash… plus a quick and easy sale. When I pay all cash I use private lenders. We make excellent profits helping our buyers and sellers and that allows me to offer a high rate of return to my private investors. Do you know anyone who might have cash savings, other investments or retirement funds that are not consistently and safely getting them a high rate of return?”

3) Build your credibility kit

Here are some ideas to help you put together an information package for prospective clients. Always carry some kits in your car and a few standing by to be mailed out. Much of what would go into your kit can be used with buyers and sellers also.

• Personalized Cover letter
• Bio: Write a biography about you with achievements even if not industry related.
• Your Team: Write up information about other people and staff in your company.
• Mission Statement: Tell prospects what your operation is about and what’s important to you.
• Certificates: Memberships, associations, recognition, awards, licenses, etc.
• Testimonials: From buyers, sellers, investors, CPA, attorney, banker, insurance agent, title company, etc.
• Press Write-Ups: Stories about you, your company, your community service, etc. and articles you have had published in print or online.
• Actual Deals: Show a number of buy/sell transaction perhaps with how much your private lender made or could have made on the deal. Photos are an added touch.
• Associations: Real Estate Investor Association, BBB, Chamber of Commerce, Rotary, etc.

4) Create your presentation

Use a written outline, brochure or PowerPoint slides to cover all the important benefits of your private investor program. Use examples, answer common questions or objections, include testimonials and have a call to action so people know what to do to get involved.

5) Flap your lips to everyone you know

Always be on the lookout for an opportunity to deliver your elevator speech. Explain your program to anyone who shows an interest. Many of your best prospects will not be wealthy. Offer to mail information to anyone interested. Set appointments whenever possible to more fully explain your offer or to deliver your prepared presentation. Work your ‘warm list’ before ever cold calling or cold mailing. Your warm list includes:

6) Follow up on your leads

Close for a phone appointment, office meeting or lunch. Deliver your presentation one-on-one by appointment. Take a new prospect to lunch once a week. Set a goal to have 4 appointments to your monthly marketing plan. Follow-up after appointments with phone calls, postcards and letters. Add new lender marketing campaigns for generating new leads to your monthly plan.

In Conclusion

There you have it. Six steps for getting more private money. Now for some good news… all you have to do immediately is step 1 and step 5. There is no need to what until everything is perfect to get started. Build this bicycle while you are riding it. Perfect your elevator speech and lender presentation as you’re flapping your lips to everyone you know… and lining up cash for when you need it.

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Richard Roop is one of the top direct response marketing ‘gurus’ and consultants dedicated to helping real estate investors generate more leads, negotiate better deals and create more consistent, predictable cash each month. He has done over 300 deals, manages millions of dollars in real estate and still actively buys and sells houses every month. To learn more about raising all the private money you will ever need visit, http://www.RichardRoop.com/money