This is why you don't have any private lenders, plus how to get one!

    So, you've heard about private money and you finally figured out that going to the bank to get loans and kissing the loan officer's butt isn't going to get you but so far ahead.   And frankly, one wrong move will make your credit stink to all conventional lenders.   Yes, private money is not only the RIGHT way to do this business, but it's the smartest way to stay in the business long term.  From coaching and teaching clients all over the country, I get to see patterns that frankly have nothing to do with a person's color, race, background, religion or socioeconomic status.  It may sound weird but I really think most people are simply SCARED of success.  Having raised hundreds of thousands of dollars in private money from all types of people, I've learned a thing or two about how lenders think, plus I am one as well.  

     Most lenders don't even care about whether your project is sound or 100% of all the numbers make sense when you present your deal to them.  They really want to see that you put a solid presentation together and that you're providing them with personal value and you have passion about your deal.  I feel most of us investors are so scared to simply ASK people for money, they automatically short circuit their business even before it gets rolling.  For instance...  When a new coaching client signs up for my training, one of the questions on the questionnaire is "Do you know any family or friends that may be interested in investing in your REI business?"  I'd have to say 9 out of 10 people quickly answer that question with a short NO!  But when we go over the questionnaire together, they quickly realize they never even asked anybody to invest with them.  The verbal answer I get is "well, I don't think my friends or any family members have any money".  

     You'd be shocked to know that people don't share all their financial business with you, for one reason or another.  People don't come out and talk about  a large settlement they may have received.  But, if you simply ask, you'd be surprised what people will tell you.  Since I've been in the REI game from 2004, I'm accustomed to asking crazy questions, and I've gotten pretty good at it.  I remember when I was scared to death of asking a person what their mortgage payment is or how much they owed.   If you feel scared about asking for money, just start off like this.... "Hey uncle Jo, would you mind if I asked you an off the wall question?"  It always breaks the ice and you just may get a big check by using a few short words. 

     Now, after you get a lender on the hook, another thing I notice is that investors want other people to take ALL the risk.  From the start, I always saved up some of my money to put into the deal.  It's often known as "skin in the game".  Don't approach lenders being needy, that's a sure way to get passed over.  Make sure you have a 100% great deal that has a lot of meat on the bone, plus you have a few of your own dollars to contribute to make it work.  Now, being seasoned, I can put more leverage on houses because my lenders know that I'm not going to over leverage a house with their money.  They actually WANT to have more money in the deal, that's how they get paid.  What value are you bringing to a potential lender?  Remember that all so famous radio station WIIFM, What's In It For ME??  We all are looking for a good ROI in life.   

     So when you ask for money, I recommend going in already expecting a YES.  That way you can have your 2nd step ready to go.  Don't wait until the YES comes in, that will keep you scared.  I had a client tell me recently he wouldn't know what to do with the money even if he had it.  Remember, this type of money can only be invested, and not spent...   I told him once he gets a lender, we can do JV's to get the money working and show his lender this game is real.  Finally, team up with a pro if you're new just to get credibility and do a deal to create momentum.  Go out there and at least TRY.  Who cares if you mess up, you can always fix things as you go!!!    Make it happen!!