"How to Play the Right Private Money Offense”

Let’s say your job was coaching a professional football team.

You’re next opponent is a division rival. They have a tough quarterback, a good defense and are well coached.  Several days before the game, your assistant gets the game films together from yours and your opponent’s previous games. They also want to schedule meetings with you to sketch out a game plan. But you blow it off.  You tell them that you’ll just wait until the game and then see what the other team does. Once you see the other team take the field and see a few snaps, you’ll be able to sketch out a game plan then. Your fellow coaches leave scratching their heads.  Game time comes on Sunday. Your team gets pummeled. It’s a bloodbath.   Would this really happen in a professional football program? Not a chance.  Listen up real estate investors: stop approaching your business like the football coach in the story (above).

What do I mean? Well, one of the biggest things people have trouble grasping is that the time to raise private money is BEFORE you need it. It’s part of the ‘game preparation’ for real estate investing.  However, most real estate investors take the opposite track: they take the “I’ll just wait until the game starts before I prepare” approach. Not good.  As with most things in life, if you know something will come in handy, the time to get is BEFORE you need it.  The best time to get gas for your car? Before your fuel light goes on. The best time to start eating healthy and exercising? Before your doctor tells you that you’re about to have a heart attack.

The best time to start raising money: Before you get deals under contract.  It’s kind of like the Boy Scout code: always be prepared. Lining up your financing before aggressively pursuing real estate deals is the best path to profitable results.  In this same light: preparing for raising private money is important, too. Getting the following ducks in a row is important to a fast start:

•             Business plan

•             Offering documents

•             Deal structure

Preparing might seem like less fun the ‘doing.’ I’ll probably agree with you on that. Preparing for a deal is not as fun as negotiating, the adrenaline rush. But, preparation is where the profits are made.

It’s where you lock your goals in place and mint that money in your mind before it hits your bank account.