A Hidden Source of Private Money

Raising private money should be a focus in your business.

Once you've made the decision to bring private investors in to finance your deals, your focus must shift to attracting people to your opportunity. The typical route taken at this point is a slow, steady beat of the "get secured returns at 10% per year" drum - which all to often gets heard by the wrong people in the wrong context.You might find yourself casting a wide net and coming up with an old boot and a rusty can. But, there's a better way...

What if you could turn every person you meet into a marketing voice for you? What if each time you got a business card there was a possibility of real business to result from it (instead of tire tracks running over it in the parking lot). Well..

There is a way to turn non-investors (people who aren't able, ready or willing to place funds with you) into great referral sources for private money. This is your hidden source of private money. It can and should be a goldmine for you. Why more real estate investors aren't keenly focused on referral marketing for private money is completely beyond me. To broaden your reach, you must step outside of the real estate investment world and grab the attention of other business people and potential referral sources. Remember: there are many people out there who are being victimized by Wall Street and would benefit greatly by placing investment dollars with you!

Be careful not to get caught up in thinking the only source of private money is that which comes through direct response - e.g. your website, social networking, emails, letters, postcards, ads, newsletters, classifieds. If you broaden your scope, you can catch a lot more prospects. In fact, if you implement a direct and indirect approach to marketing your opportunity, the speed with which you get big time results will increase dramatically.

You can turn every person you meet into a referral source for private money. This requires you to be focused and purposed to get private funding this way and, of course, I'm assuming you have a good investment opportunity.

As I've written before, getting private money is a marketing process - not a financing process. It's not the same thing as filling out bank paperwork and waiting like a good soldier. An unfortunate, but true, fact is that most people that have the money to invest with you do not know about your opportunity. And, if you don't tell them, who will?

Here are some suggestions for ramping up this part of your private money marketing:

• Get plugged in - Networking centric groups, such as BNI (Business Networking International) or your local chamber of commerce (if you have a good one) are a 100% must-do. Why pass up the chance to present your opportunity to someone each week who has a vested interest in finding an investor for you? Why will they help you find investors? Because you will, in turn, reciprocate and send business to them. The power of these groups is tremendous.

• Partner up - Consider partnering with other real estate investors, often those with less experience, who may have private money sources. If they bring the money and you bring and manage the deal, everyone wins. You win, the new investor gets experience and the private investor wins. Be careful to lay out the ground work ahead of time, so the private investor isn't perceived to be 'stolen' by you. You may have to partner with real estate investor for use of their contacts money, but there are worse things, right? Think of the referrals you could get from a few deals like this and don't forget that you're making money on the deal as well as building your resume.

• Professionals - Leverage relationships with professionals, like your CPA or attorney. Show them your business plan and investment details and let them bring investors to you. If you truly have good deals and strong returns, a referral from a professional should be in the works.

If you think that you don't have the time to tap into this hidden source of private money, guess again. In just a few hours spent per week you could have hundreds of thousands of dollars in private money referrals coming at you. When you have a good business model and a solid value proposition, economic principles dictate that money will be attracted to your door. All you have to do is open it.