Raising Funds for Real Estate Investments

When people ask me what I do for a living I always respond with the following; “I help people build wealth through real estate.” Then, I just shut my mouth and I am silent (not a simple task for me). The point is that I'm trying to get them to ask me more questions. If they're interested, they will ask more questions. If they're not interested, we will move to another subject and I'll ask them about themselves.

There are millions upon millions of dollars in self-directed IRA's that are sitting dormant and not earning any interest. In addition to that, there are millions and millions of dollars sitting in the stock market losing money or in a mutual fund earning 5% or less. Many of these people don't even know about self-directed IRA’s or understand how they work and that they can actually invest that money in real estate and watch it grow. People are always skeptical but when you let them know that they are lending money to you at 70% of the true value of the property and that property is the collateral, they tend to listen a little closer. Every one of you knows someone who has a self-directed IRA that is sitting dormant or not making at least 8% interest.

The easiest way to raise money is to show others how they can earn interest off of your efforts and expertise that is collateralized by real estate. If you have done one or two deals then that is a great portfolio of evidence of how to make money. I always recommend that investors put together a history folder. In that folder I would have the HUD from when you bought the house and the HUD from when you sold it. That shows proof of dates of how long the project took and proof of what the profit was. In addition, I would have pictures of the start, the middle and the finished product. Then, I would also have a summary sheet with all of that proof on one piece of paper that is easy to follow. It sounds so simple and it is.

My hard money company was built on self-directed IRA's. As a mortgage broker, I was always able to see how much money people had in reserves including self-directed IRAs. They were also real estate investors and understood the value of owning and investing in real estate. Today I have control over $20 million dollars of other peoples self-directed IRA's by funding investors on their behalf.

Once you get one or two people that have been through a deal with you, they tell someone and that person will tell someone and soon you'll have all the financing you need. Don't allow the fear of asking someone if they're earning 8 to 10% on their self directed IRA's stop you from asking. Keep in mind you truly are helping them, as this is a win-win for all. Also you must take this responsibility very seriously and know what you are doing. Put the lender investor needs in front of your own. Never take someone’s only investment money. I always tell people to never lend what you can’t afford to lose. There is risk in everything. Always get title insurance and always go through an attorney or title company.