Looking For Funding? Sometimes You Don’t Even Have To Ask.

     When I started investing in real estate I had a well-paying day job and bank money was very easy to get. I have never tried to borrow private money. I know I could but I have not had a project where I needed to nor wanted to. I know I could because people whom I haven’t asked to borrow from have offered to lend to me. I have had people ask to lend me money when I didn’t have a project to use it on, wasn’t looking for such a project, and hadn’t asked them for funding. Some weren’t even people I knew very well. I remember one who made an offer of a considerable amount of money after a casual conversation at a REIA meeting and a couple e-mails. The offer came with absolutely no prompting from me. I wasn’t looking for it and didn’t want it.

     I recently had a situation where this was turned around. A successful investor called me to ask for some advice on a project. During the conversation they revealed that a recent purchase had depleted their funds and they might have to delay another purchase they had scheduled. When I asked about the property it was very similar to the one we had been discussing. I joked that if they were applying for funding it was approved. I had never funded a project for this investor before and they weren’t planning on asking me to fund this project. I am fairly certain they could have funded this deal without me. I had known this investor for a while and though they didn’t know it at the time I felt I knew them well enough that we would be good partners. We were.

     There are a lot of people who lend privately and a lot more who would be willing to if they knew how and found someone they trusted to lend to. Private lending is a relationship business. The relationship is usually more important than the deal. You build relationships by sharing openly, by listening, by paying attention, by offering to help when a situation may present. It pays to be patient. Even if you have an immediate need you will often be much better served by playing it down on the initial meetings with a potential lender. Build the relationship before you build the partnership. Do this well and funding may find you even before you ask for it.