"Who Else Wants to Know "the One Way" to Get Private Money?”

"Adam, what's the one way to get private money?" a man once asked me. I thought about it for a minute. Then, I thought about it for another minute. And then another.

 

Until there was an uncomfortable silence in the room.

 

Soon the man who asked the question cleared his throat: "uh-hm...". This pulled my attention from deep thought back over to him. During those few moments of silence, I reflected upon the private money I had raised (over seven figures, multiple times) and the deals I had done with private investors (hundreds) and I searched high and low the far reaches of my mind a good answer to his question.

 

And I came up blank.

 

But, I didn't continue to sit in silence. Something d hit me. Like a ton of bricks. One of those flashes of lightening you get only when your brain is firing on all cylinders. And I want to share that with you today. Because the answer to this "burning question" is so valuable that it just might save you a couple months of weeping and teeth-knashing...

 

Here's what I replied: "can you tell me the one way to get a great deal on an investment property?"

 

The man thought for a while, the audience's attention shifting back and forth from him to me...and back again. Finally he said: "No. You could get a deal off of the MLS, from your own marketing, a website, newspaper ad, and other ways, I suppose."

 

This was a good answer. Scratch that - it was a GREAT answer. And, entirely true. There was no 'one magic way' to get a great deal on an investment property. But, there were several proven techniques that made it all but impossible to not find a good deal by using them.

 

Here's where it gets interesting: although many real estate investors will agree that there is more than one way to skin a cat when it comes to finding and selling properties, they seem to be pretty darn sure there is only one way to get private money. And, so they keep searching for that one way.

 

Which usually ends up in vain.

 

You see, getting private money relies on the same techniques and principles that you use to find good real estate deals. If somebody asked you where the good deals were in this market, you might tell them "everywhere! You could go here, there, insert place <here>.

 

To find good deals, consistently, you need a solid, proven multi-step marketing plan.

 

It might look like this:

 

    * Meet local real estate "players"

    * Build relationship with buyers agents & listing agents

    * Follow up continually and let these players know how working with you will be good for them

    * Send postcards or letters to motivated sellers of properties identified from public record search or                                                     lead generation advertising

    * Follow up consistently with direct marketing to sellers

    * Set bandit signs out on weekends to generate leads to direct call #

    * Etc.

 

 

What you would do if you wanted a continual flow of deals is you would implement a system that would cast as wide a net as possible. If you really wanted to eat and had the option of fishing with a bamboo pole, string, and worm versus a huge net that could drag the entire lake, which would you choose?

 

I hope you said the net. Because that's what it takes to generate private money - so much private money that you won't ever have to worry about how you're going to close a deal ever again. You won't have to worry about coming up with the equity to buy a large commercial building. There are a lot of ways to 'blow it' with private money

 

And, the first and biggest way  you can blow it is to never give yourself the chance to raise any. If you rely solely on posting your deals up on internet websites and praying for a response; if you rely solely on talking to a few people at a networking group; if you rely solely on putting up a website (which probably doesn't have the right response mechanisms in place) ; if you think Face book is your private money getting savior, well then... You're gonna be very disappointed.

 

Maybe you'll get lucky (hey, it's better to be lucky then good sometimes). But, it will be tough to make this work for you on a consistent basis. It would be akin to opening up a pizza restaurant and then saying the only way that  you were going to rely on getting customers is with radio advertising.

 

Not a good idea.

 

In your quest for the 'one' silver bullet solution to getting private money, you should really think about fishing with a net and maybe some dynamite instead of just a bamboo pole and a string.

 

Think of private money the same way you do real estate investment deals. I guarantee you'll be pleased with the results.

 

-Happy Investing