How to Wheel and Deal with Private Money (and save money on Advil)

Yes.

 It's time to visit this subject again...setting up private money deals. One of the best things I can provide for you is a road map through the minefield so you don't step on any of the 'Bouncing Betty's' that I did. Here's the typical process most investors go through with their deals:

    * find deal

    * scramble around for funding

    * Hopefully close

Does this sound at all familiar?

I can already hear it: "but Adam, I'm just finding end-buyers and assigning the contract." That's great. If you can play the arbitrage game with real estate - more power to you. However, I've rarely seen investors make this a consistent and reliable stream of income. A deal here and there, but what you really have with that model is a marketing company not a real estate company, with small profit margins relative to what you get when  you buy and sell or buy and hold for cash flow. You can do 100 transactions and make $1,000 on each one or you can do 4 transactions and make $25,000 on each one. Personally, I'd rather do the 4 transactions if I wanted to make $100k. Unfortunately, most people would rather go for the route that gives them the most headaches for the least profit. But, I stopped trying to change people's minds a long time ago. Ok, so here's the best way to go about profiting with private money

    * Funding

    * Deal

    * Sure-fire close

The difference is in steps 1 and 2. And, just so you know, it's easier to raise private investor money before making offers than it is after the fact. What you do is put a plan together, put your opportunity in front of investors, get funding commitments/proof of funds, make offers and close deals. Bing. Pow. Zing. I've duplicated and used this business model over and over and over again to flip houses in one of the worst economic areas in America. If I can make it work, you can too (and maybe even better). If it wasn't for private money and this deal structure, I wouldn't be in real estate right now. You see, there was no other way to buy and sell houses or acquire other, larger properties, here in Michigan where I live and work if there was no "cash." Money talks and B.S. walks. Do yourself a favor and write that on a piece of paper and stick it on your bathroom mirror so it's the first thing you see in the morning. You'll get a lot further in your real estate investing business if you keep it in mind. Is the prospective private investor serious? Well, did they commit funds? If so, they're serious. If not...money talks and B.S. walks. Is the buyer for your property serious?

 Well, did they put down a nice size earnest money deposit? If not...money talks and B.S. walks. It's pretty relieving to come to grips with this eternal business truth. It's even more of a relief to know that you can put a lot of ammunition behind your deals when you raise money before launching off and putting in offers. Oh, and FYI: it doesn't matter if you're working with bank owned, or home owner (short sale, etc.) - Money talks and B.S. walks. I've gotten several very lucrative deals over the last year (resulting in roughly $80,000 in incremental profits) because I was able to put down LARGE earnest money deposit (EMD) checks. I'm talking $10k EMD's on $50k houses or $20k EMD's on $100k houses. I've even made offers with an EMD check for the full amount of the offer. How would like to see that one come across your desk? You'd be intrigued wouldn't you?  Yep.

Thus the power of my "Ready. Fire. Aim" approach to private money raising and profitable real estate investing. Your Advil bill will go way down when you adopt this approach - as un-needed stress and anxiety will dissipate quickly.

You'll be glad you did.