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Posted over 5 years ago

6 Steps for Raising Private Money To Do More Deals

Raising and using private money has always been a popular way to help grow your portfolio in slow, normal or even hot real estate markets. But it has become increasingly more important during this recession as banks are redefining their core assets, coupled with lower Loan to Value ratios and more conservative valuations. In addition, investors who possess less than perfect credit and buyers seeking “distressed” facilities with low cap rates are having a hard time getting the banks to partner with them.

So what to do. Give up? Sit on the sidelines until the market turns around and financing becomes abundant once again?

Well if so, you’ll miss out on arguably the biggest buying opportunity in our lifetime. Have you been wondering how your competitors have continued to grow their portfolios during this financial crunch? (hint: it’s the title of this article). Yes, they’re tapping into the billions of dollars available in the private sector to increase their holdings, often times, without having to darken the door of a bank.
The benefits of developing a private lender program and lining up dozens of investors eager to give you cash are substantial:
For starters, you can begin buying smaller facilities for 'all cash' at significant discounts from distressed sellers and lending institutions that have taken back their collateral on non-performing loans. We have purchased many of these for as little as 30 cents on the dollar.
Second, you can structure offers on facilities with a great deal equity or owned free and clear and the seller is willing to finance the deal with a significant down payment.

Finally, you can turn many non-deals with no equity into super profitable deals with substantial equity by paying off existing debt at a discount... using private money.

6 Steps for Raising Private Money:

1) Create a program that is easy to explain to others 

2) Write and practice your 60-second elevator speech

3) Build your information and credibility kit and/or website

4) Create your presentation 

5) Share your business model with everyone you know

6) Follow up on your leads



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