Private Money Lenders - Where to Find Them and Grow Your Real Estate Investing Business

To locate private money lenders people have employed many different successful techniques.

For instance I heard of a real estate investor that found their investor standing in line at a grocery store. It was a long line and he started up a conversation with an older gentleman standing behind him. The topic came around to real estate after the gentleman asked what the investor did for a living. As soon as the investor said he was a real estate investor the gentleman perked up and said how ironic because he was looking for an investment since the stock market had tanked. It is as easy as that. Now that investor is a millionaire and retired at 35 all because he had the guts to talk with someone while standing in line at the grocery store.

Answer ads placed from for sale by owner properties is another excellent way to find private investors. Having an excellent real estate agent on your side will help you greatly research these properties before you waste your time and the sellers asking for a loan they cannot provide. Most multiple listing services provide agents with a way to see if the owner owes anything on the property and how much and to what bank. Weeding out the properties that do not qualify in the comfort of an office is much better than after you have spent the time and energy to plan an offer and get the earnest money agreement to the seller only to have it rejected because they owe too much on the property.

You can still go to another private money lender, instead of working with the home owner but it makes your life a lot easier and makes your business run a lot smoother if you can know before putting in an offer on a property the exact situation the seller is in. This gives you so much more purchasing power because now you can plan your offer to satisfy what the seller needs and also what the property can provide. This also makes your offers a lot more successful so you are not wasting tome on investments that will never make you any money.

The biggest and best techniques when working with private money lenders is to treat them with the respect you would a boss or a prestigious client and keep them informed of your decisions and you will have an excellent contact for years to come.

I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by going to http://realestatewealthtoday.com/FREE-eBook.html.

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit.

10 Reasons to Use a Professional Property Manager

10 Reasons to Use a Professional Property Manager

  1. You don't need to show the property.
  2. You don't need to fix the toilet or do maintenance.
  3. You don't need to answer emergency call in the middle of the night.
  4. You don't need to get calls from the HOA when the tenant is breaking rules.
  5. You don't need to do background or credit checks.
  6. You don't need to do walkthroughs and inspections.
  7. You don't need to handle an eviction.
  8. You don't need to collect the rent.
  9. You don't need to know all the real estate laws.
  10. You can spend more time acquiring additional properties rather than managing them.

12 Powerful Tips to Getting Private Money

1) It’s Easy to Get

I recruited my first private money lender when I was 22 years old . . . and if you’ve ever seen a picture of me, you know that I look young for my age. Soooooo, when I signed up numero uno, I looked like I was 17.

People talk about getting private money like there’s a big mystery behind it and say, “Everyone that I talk to wants to hold on to their money right now and is worried about the real estate market.”

That may be someone’s conditioned response but when you educate them on the process, how it works, why it makes sense, and you ask them good questions to elicit their needs and goals, the investment opportunity sells itself.

Come on guys . . . if a 20 something college drop out that looks like a teenager can do it, you can too!

2) Private Money Is All About Personal Relationships

By personal relationships, I mean relationships that YOU build in order to get private money. I often times get asked what one of my private lenders would charge to finance a deal. And I have to tell them, that’s not what it’s all about.

Get out there, spread the word that you’re a real estate investor, that you have great investment opportunities, and cultivate rock solid personal relationships.

3) No Credit . . . No Problem

Private money loans are based on the property, not the person. When you have a great deal under contract . . . let’s say for $120K that’s worth $180K . . . the person that lends you the money is doing so based on you buying the property far under value.

4) Virtually Unlimited Quantity

A private lender is just an everyday person who lends money to you as an investment rather than investing the traditional way through CDs, mutual funds, stocks, and bonds.

Anyone that you know and everyone that you meet is a potential source of private money. Most people, especially in today’s market, are looking for good opportunities to invest.

You’ll never run out of private money prospects for your real estate investing needs.

5) Process of Harvesting Funds

Check out the article 4 Steps to Harvesting Private Money for Your Deals. It breaks down the process to … till the soil, plant seeds, nourish your field, and harvest the crop.

6) Go for the Formal Appointment

This is one of the vital pieces to the private money getting puzzle. Investing in anything is a serious matter and should be treated as such. Once you pique someone’s interest with your 30 second commercial, you go for the formal appointment.

This is where you meet with all decision makers to present your investment program and educate each prospect on your business model and how it relates to today’s market.

7) Use a Professional Presentation

The presentation that you present to your private money prospects should be professional and specifically crafted for optimal success. If you don’t already have one, you can download the private lender PowerPoint presentation that I cultivated over the years.

There’s a script included to show you exactly what to say and how to say it as well. Also, I’ve studied sales extensively and integrated an advanced sales process into the presentation. It’s some pretty powerful stuff . . . enjoy!

8 ) Make Your List

Here’s your first action step . . .

Now, this is a brainstorming session. Which means, do not attempt to qualify your answers . . . just write down what comes to mind. One of the biggest mistakes I see people make time and time again is to disqualify people.

I want you to write down the first five people that come to mind that you could set up an appointment to present your investment program. DO IT NOW!

If you are already reading this sentence, you didn’t listen to me. Please stop reading this and write down five people.

OK, now write the date by which you will have called them to set up your first private money presentations.

By committing to following through on this action step, you are on your way towards getting your next deal financed with private money.

9) Listen to Henry Ford

I thought I would bring in the wisdom of Mr. Henry Ford to help us out a little bit . . .

“If you think you can do a thing or think you can’t do a thing, you’re right.”

This is powerful advice! Your expectations will play a major role in your success or failure at getting private money. The simple fact that there are thousands of investors all across the country that use private money to finance their real estate deals should be proof enough that you can do it too . . . regardless of age, race, your network, your net worth, or any other excuse you may come up with.

10) Follow Up Until They Buy or Die

The key to my success over the years at building my base of private lenders was aggressively following up with people (after I had shown them the PowerPoint presentation) until they lent me money on a deal or told me to get lost . . . and the latter never happened.

After you formally present to someone, you will have gathered some much needed information from your prospect about their needs and goals. Now as you follow up with them, only present deals that match the criteria that you gathered at your meeting.

And use my philosophy when you need to get a deal financed . . . “Ask until.”

11) Where to Find Private Money Prospects

One of the best places to find potential private lenders is at your local real estate investment club meeting. Often times, these meetings are filled with people who have heard real estate investing is lucrative and want a piece of the action but don’t really want to go through the process of learning how to do it themselves . . . that’s where you come in!!

Educate them on how they can get involved investing in real estate without having to do anything other than writing a check.

Also, check out this article on the 4 Types of People Most Likely to Lend You Private Money.

12) Business Card Reversal Trick

This is where you use the back of your card for a marketing message that piques someone’s interest in your investment program without you having to bring it up in the first place.

Here’s what you do . . . on the back of your business card, have a phrase like, “Learn How to Make High Returns Backed By Real Estate! Email at _____ For More Info …”

Now, when you hand out your business card, you’ll have people ask you what this means. Instead of you just telling people about your investment program, people are asking you about it . . . which is where you want to be.

- Patrick & Trevor

Checklist for Fast Closings of Private or Hard Money Loans

Most investors who seek private or hard money need it fairly quickly. Reasons can include:

–Other Notes coming due

–An unexpected interruption in funding

–A quick takedown of real property being offered at a deep discount

Or, the worst, a Note being called due by the bank without advance notice. Whatever the reason, private or hard money loans usually need to fund quickly.

One of our “preferred” lenders tells us that a loan will fund as soon as it takes them to feel “comfortable” with the deal as a whole. For our lenders to feel “comfortable” with a deal, we must provide specific pieces of information to them which help them get to the comfort zone very quickly.

Getting your lenders to this comfort zone requires a specific checklist that both borrowers AND brokers need to keep in their back pockets. One of the first items on this list is to identify the collateral being used for the loan. This is one of the single most important items that can stand between you and a speedy closing on the loan.

  • What is the collateral or how is it classified?
  • What is the value of the collateral being used?
  • What is the value based on? (local comps, broker’s opinion, appraisal, etc.)
  • Where is the collateral located? (Can it be readily accessed for inspection?)
  • What encumbrances or liens are currently on the collateral?
  • Who has Title to it?

Other important items on the checklist for speedy private or hard money closings include:

  • 1. Who is the borrowing entity or individual? If borrower is an L.L.C. or corporation, who are the members? What is the contact info. for all borrowers?
  • 2. Use of Funds: Lenders will need a brief but descriptive explanation for the use of the loan proceeds. If there is any cash out requested, borrowers will need to substantiate every dollar of the cash out. This is usually shown best with a basic spreadsheet.
  • 3. Basic loan application: Primary borrower will need to provide a full loan application which includes social security number, date of birth, list of assets, etc.

If you are concerned about getting your loan funded quickly, use an experienced broker that will know what other crucial items are on this checklist. Often, borrowers will attempt to go to the lender directly, expecting a speedier route to closing. In my experience, not only is NO time actually saved by circumventing the qualified private money broker, but all too often, unnecessary fees are paid to the lender and both money and time are lost.

posted by Blake Reese on March 9, 2009

Preview Call - Private Lending Group Coaching Program

This is Mike Lautensack and I am starting a new Private Lending Mastermind and Group Coaching Program on June 23, 2009.

We are going to have a Free teleconference call on Thursday evening to lay out why Private Lending is the key to your real estate investing success.

This FREE Teleseminar will be a step-by-step overview of the private lending process and tell you how to fund your real estate deals without banks or PERSONAL GUARANTEES!

Teleseminar Series: Thursday, June 11, at 8:00 PM Eastern

To sign up for this FREE tele-seminar simple click here ===>
http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html
On this call you'll get insider secrets on:
  • A complete system for achieving success using Private Lenders...
  • The advantages of using Private Lenders compared to traditional mortgages or hard money lenders!
  • Discover the 6 keys steps to setting up a Private Lending program...
  • Where to find Private Lenders and what "NOT" to do in marketing for Private Lenders
  • FREE Bonus for everyone that registers and attends!
  • And of course, a whole lot more!
The Private Lending Mastermind and Group Coaching Program will be a 16-week step-by-step teaching and coaching program for setting up your own private lending program and how to find and attract private lenders into your real estate investing business

It will be this Thursday night (June 11)!

To sign up for this FREE tele-seminar simple click here ===>
http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html

Check for the time in your area...
  • 5:00pm Pacific Time
  • 6:00pm Mountain Time
  • 7:00pm Central Time
  • 8:00pm Eastern Time
Seating is limited and you DON'T want to miss the educational, information packed call! We look forward to having you on the call!

To sign up for this FREE tele-seminar simple click here ===>
http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html

Thank You,
Mike Lautensack

Real Estate Wealth Today
http://www.realestatewealthtoday.com/

P. S. I only have 90 lines available for this call, so please get on 5 minutes early so you don't miss the call.

To sign up for this FREE tele-seminar simple click here ===>
http://www.realestatewealthtoday.com/Private-Lending-Group-Coaching-Signup.html