When it comes to raising private money for your real estate deals, there are 3 proven ways I suggest you go about finding your private lenders.
The keys with private money for real estate is to keep it simple. You’ve heard the old saying, and yet when it comes to most private money strategies it just gets too complicated. Private money is a very simple concept there is nothing magical about it and you don’t need to fear it.
Let me explain what I mean before I teach you 3 ways to go about finding private lenders. Private money is simply private money lent by individuals, also known through investor lingo as private lenders, to rehabbers and landlords that pay cash for properties. In return for the cash, the private money is secured by the real estate with 30 percent or more equity covering the loan. That makes private money for real estate deals a pretty safe loan (or investment) for the private lender.
The problem that most real estate investors have when it comes to actually getting the money is finding private lenders. In my training program, on raising private money, I teach real estate investors that the key to getting the money lies in teaching your lenders to become lenders. But, the key to finding the potential lenders lies in following 3 simple steps.
First, create a business or at least a business plan that is clearly focused on the distressed property investing business. I mean your business buys houses at significant discounts and then fixes, sells or rents for a profit. Clearly communicate this business to your potential private lenders but make absolutely sure that you focus the benefits of the business on them, your private money lender and don’t focus on you.
Second, start with your warm network. Now, I know, I know, everyone says start with the people you know. What if you don’t know anyone, right? We’ll get to that in just a moment. But first, lets understand that I am not saying go ask for money. Instead, teach your potential private money lenders what private money is all about. Let’s face it, most people do not even know that the opportunity to earn such high returns secured by real estate even exists. So, teach them about it.
Third, spy on the success of others. If you don’t know anyone with money as the complaint is usually voiced, instead of finding new lenders, plug into existing private money networks. Once a private money lender gets a taste of lending private money on a real estate deal they are usually hooked. Private money is a great opportunity to passively be involved in real estate without the hassles of rehabbing and renting.
And then, to tie these three strategies together, I suggest you use cash magnets, also known as private money attracting components in your business, to attract and secure private money. Once you discover how to effectively use these strategies in a complete private money raising system you will be well on your way to getting all the private money you need for your real estate deals.
Rob Swanson is the creator of “3 Secrets to Raising Private Money”. If you want to learn the #1 technique you can use to raise millions of dollars, claim your FREE video training now at RaisingPrivateMoneyNow.com. You may reprint this article as long as the link above remains active.