I have someone who agreed to gift me the down payment for my first purchase (Multi-family and I will be occupying). But after discussing with him about pulling from his investment account (401K), I’m not convinced that he’s comfortable with that strategy. He hasn’t backed out and I want to make sure he doesn’t. What should my second pitch be to him? How do I get him completely on board? What’s a good repayment plan method? I suggested paying back plus interest as well as any potential penalties for withdrawing. He can’t hack with me because he lives in another state, wife and kids, and works about 60-70 hours a week. I need to sell this to him!
@Aletha Brown - Congrats on having someone available to partner with. Before getting into the tactics, I'd offer a subtle but important mindshift. You are not selling anyone when you take on a partner like this; I actually cringed when I read "pitch" and sell". I know you don't mean any wrongdoing, but if you're writing it this way, it's definitely coming off that way to your potential partner.
This guy is taking out money from his 401k that he spent however many years gathering. There needs to be a huge benefit to him to do this and there is a huge trust factor that you need to earn. The conversation should be around why this is valuable to him and how you will bring him value he can't find in his current 401k - not how you will sell him on the deal.
If he is not comfortable, have an open discussion on the specific points and try to come to a resolution. If you need to bring in someone more senior who has done this a few times to provide stability, I would highly recommend networking with someone in your area that can help provide additional credibility to the deal.
Be natural and honest... If you're looking for a pitch then you lost the investor. Just be you and explain what you are trying to do. If they are interested you can provide more info and educate them on the concept. Good luck!