What to Say When Meeting with a Hard Money Lender

Asking another person for money isn’t an easy task for most of us. In fact, it can be downright uncomfortable. But when you’re an investor without a lot of capital and looking to fund your investment through alternative means (i.e., hard money), you have no choice but to ask for money. Here’s how you can make this process easier on you AND your potential lender:

Learn about your lender

First up, take some time to do a little research on the lender before you meet. Having some background information on the person or company that you want to partner with is smart because a) it gives you an idea of what to expect so you can better prepare, and b) it makes you look good by showing your willingness to do your homework. Knowledge is power, people, so take the time to learn as much about your potential partner as you can.

Get all your info together beforehand

This is one is super important and also must be done prior to your meeting with the lender. You want to come prepared, and the best way to do that is with a handy informational packet that will help the lender get to know you. This should include all your basic info, like your name and contact details, but it should also cover your mission/objectives, operating procedures, and an explanation on how you plan to use their money. If you’ve invested before, you can include a section about your past experiences and track record, as well as any photos if you have them. Lastly, add in a few referrals for the lender to contact if they want to, and outline the expectations that will be in place for both parties.

Go over the investment - with proof to back up what you’re saying

After you go through the informational packet, you can move into the details on the particular investment you’re seeking funding for. You should have already run the numbers to determine potential cash flow and ROI, so bring a printout that shows these figures and your analysis. Be prepared to explain all this, too; any lender worth their salt will want good, hard data that backs up what you’re telling them.

Be proactive about addressing concerns

Any investment comes with risks, so don’t pretend like you’ve got a deal that’s guaranteed profitable - because you don’t. Be upfront about this, and be willing to discuss any and all concerns the lender may have. Usually these amount to “what happens if the deal is a bust?” or “what if the housing market crashes again?” Hopefully you have a plan for dealing with scenarios like these, and talking through them with the lender will help alleviate their concerns and put them more at ease.

Ask some questions of your own

Don’t be shy about asking any questions that you may have. While this meeting is more about selling YOU rather than them, it’s okay to put the spotlight on them for a bit, too. Not only will this give you any information you’re lacking, it will also provide insight into his/her personality so you can ensure that you will be a good fit as partners.

Be confident but not sales-y

Finally, go into the meeting with a good measure of confidence. Even if you’re very nervous and feel weird about asking for money (which is totally understandable if this is your first time doing it!), put on your game face and show them you know what you’re talking about. Being confident in your knowledge and abilities will, in turn, boost their confidence in you. Be careful not to appear arrogant, though, as this can be off-putting. So can aggressive sales tactics, so tread carefully if you have a tendency toward this.