Let’s face it, money does not disappear, it changes hands. So where is it? There is so much money sitting on the sidelines or in investments making little or negative returns. Many of these individuals would love to have a double digit return backed by real estate.
For many investors, financing deals is the challenge. Here are some steps to get more Private Money then you could ever need.
- Pitch your opportunity to everyone – You are not asking for money, you are inviting people to make a great return on their money. The purpose of this step is to get them excited and begging for more information. Usually just an elevator speech and a success story if needed. Do not answer questions, set up a face to face meeting and present your program. Opportunity awaits the savvy investor. Many investors give out free information. If you can build credibility and get investors to come to you, even better!!
- Face to Face Presentation – Set up a face to face meeting with all decision makers. At this meeting you can build the most important thing when it comes to generating private money, build TRUST. You can also present using a net meeting if face to face is not possible. Try Yugma, free software allowing you to share your computer screen.
- Find a great deal, illustrate a win-win, the deal and the risk – Educate interested parties on what is in it for them, the numbers on the deal and how the deal can withstand the worst case scenarios. The best private investors have some knowledge or experience in real estate, are comfortable with an investment backed by real estate, know a good deal when they see one, but do not have time or do not want to deal with the hassles.
- Play the numbers, all you need is one YES – Do not give up after 3 people, you may need to present it to 100 people before you get the desired results. It is never a bad thing to have people fighting to give you their money. Group presentations can work as well.
- Handle objections, ask for referrals – Learn how to handle objections, anticipate the most common ones. And always ask for referrals. If you are leaving a presentation without a YES you should have 3 referrals.
- Treat them like your grandmother – Be great to them, not good, great. Also be completely honest and set expectations so you can shatter them.
Whether you are starting out or a savvy investor with decades of experience, private money can take your business to the next level. No down deals, close fast with cash, no hassles with brutal conventional or hard money requirements and underwriting, you set the terms, the advantages go on and on. One last tip to make sure your private investor is committed, make them cover the earnest money, inspection and other fees before close. If they are not willing to cover those fees, they are not committed and will not fund at close anyways. Happy Investing!!