They said what? What to do if a Private Investor says "NO"

You've worked hard. You've marketed yourself and your business opportunity. The time is right.

You're sitting in front of a private investor, proposing a deal that will make you and them a lot of money and...

They said what?

"No."

Uh oh. You push the panic button inside your head and go into scramble mode but nothing works. You and the would-be private investor part ways. Anger, frustration, confusion. You name the emotion - you're feeling it. Questions run through you mind like:

    * Why did they say no?
    * Did I do something wrong?
    * Was it my breath?(ok, a little humor here...)

Facing rejection of any kind isn't easy. Especially with private money. After all, didn't somebody just reject you and your whole business by telling you that they weren't going to loan you money?

Honestly, a lot of people don't like to talk about this aspect of real estate investing - you're going to face some rejection. There, I said it. That wasn't so bad, was it?

You're going to make offers that will get rejected. You're going to propose deals that will get shot down. You're going to try to get better prices from contractors and they will balk. Rejection, or getting told 'no' is an active part of business. People don't always want or need what you think they want or need. You may think that a seller would surely accept your offer, but it gets shredded for reasons you can't tell.

Although it may sound cliche, rejection is part of the process of success. It helps sharpen you and make you better. It helps you appreciate when you hear "yes" that much more. In fact, rejection might be too strong of a word - it has a very negative connotation. Perhaps it should be called "learning moment."

One of the best things you can do when a learning moment comes upon you (which it will less and less as you improve your money raising skills) is to recognize it for what it is. Sometimes you can glean very helpful insights from a private investor that did not write you a check. For instance, take into account other factors that could have come into play: personal situations, health issues, family issues, business issues. Getting turned down may not have even had anything to do with you. Unfortunately, too many times we make things all about ourselves, figuring that we did something wrong, when it's not the case at all.

So, first realizing that they may not be turning your private lending deal down is a start.

Next, there are some measures you can take in the heat of the moment to better gauge the investor.

If they say "no," you can turn on your sales skills a little bit and start probing:

    * "Mr. Investor, what in particular don't you like about this deal?"
    * "Mrs. Investor, I hear you, but could you be more specific?"
    * "Is there a reason you don't want to earn 15% on your money?"

You may be able to overcome "no" by asking questions that will turn the investor around to your side. Some people  have a 'no' reflex - they say 'no' to everything, perhaps because they understand that if they don't they will simply buy everything. A lot of people have a natural level of cynicism. The more layers you can peel back in the conversation the more likely you are to get to the truth and get them to change to a 'maybe' or a 'yes.'

Private money is a business function - think of yourself not as the CEO of your business but also the CFO (chief financial officer) as well. Money needs to come into your company coffers so that you can buy more real estate. Pretty simple equation: more money = more deals.

As a real estate investor, it's important that you view getting private money as a process. It begins with establishing your opportunity and ends with profits and capital returned to all parties. The more you view private money as a process of your business, the more you'll be in tune with how the machine needs to work. And, the more you sit in front of private investors and propose deals, the better you'll get. Soon, you'll be hearing 'yes' much more often and hearing 'no' will become rare. Keep refining the process until you've got a well oiled machine.