How to Get Private Lenders to Fund Real Estate Deals

"Do You Want People Giving You All the Money You Can Ever Use to Fund Your Real Estate Deals?"

Like many real estate investors, I started out investing in real estate using my own money and credit. This worked fine for the first few deals. But eventually, as I purchased 20 to 30 properties, my lender at the time, Washington Mutual, cut me off from further deals and my personal funds dried up. I had built up a great deal of real estate equity, but was locked out from doing other deals with my traditional lender and could barely pay for my own groceries.

I had to find another way to fund real estate deals or
my investing career was over.

This is when I discovered private lenders who have funds to lend for real estate deals, but do not want the headaches and paperwork to actually manage tenants or properties. These individuals are generally middle class people, like you and me, who have some extra funds to lend. They can be retired business people, corporate executives, professionals such as doctors, lawyers, or business owners or even blue collar workers all looking for returns substantially above the 3% to 5% they get at the banks.

Let me first explain my definition of "Private Money". Private money is funding that comes from private individuals, friends, family, IRA's or any source other than institutional or conventional means. It is sometimes referred to as "Hard Money" or "Flash Cash."

The question I had to figure out was, "How do I find enough of these folks to run an active real estate business buying 2 to 4 houses per month?" To address this issue, I developed a marketing plan that would allow these individuals to call me and raise their hand to indicate their interest in our lending program.

How Do I find Private Lenders?

Well, frankly, we advertise for them. It's as simple as that! Finding private money is not nearly as difficult as people think. My simple marketing plan includes many of the following activities:

Network with everyone you know and develop a 60 second "Elevator Speech":

"Are you getting a safe 9 to 12% return on your idle cash or retirement funds? No! Well, we buy houses and pay cash for each house and we use private lenders to fund our deals. We pay 9% to 12% on notes secured by local real estate. If you are not getting that type of predicable return on your money, I'll be glad to get you the details. We occasionally hold a free small luncheon, for potential investors, or I could also sit down with you at your convenience and show you how it works. If you like what you hear, simply let me know how much you're looking to invest and how long you can have your funds tied up. I'll put you on my list and look for an investment opportunity that meets your needs. When I find one, I will call you. At that time you can pass or play. There's no obligation."

Newspaper Ads such as

Private Money Needed, Earn 14% plus 5 points, Rental, 70% LTV $65,000 call xxx-xxx-xxxx

or

Mortgage Note for Sale: $190,000 1st mortgage at 9% with low LTV. Call xxx-xxx-xxxx for more info

REIA Newsletter and CraigList Ad:

PRIVATE LENDERS NEEDED - Earn 9% to 12% hassle free on your idle cash or retirement funds secured by local real estate. I'm a professional real estate investor with over 50 successful transactions completed since 1999. I am not a financial planner, but a full-time buyer and seller of single family homes. We use private funds to pay cash for our real estate purchases and can pay you 9% to 12% when you help us fund our purchases.

To learn more visit us at www.xxxxxxxxx.com or call me at xxx-xxx-xxxx. Invest by xxxx 31, 200x and earn a $1,000 bonus.

Flyers, Postcards, and Speeches/Presentations:

We also use flyers and postcards with a similar message using the above examples. Also, one of the best ways to get private lenders is to speak or present to groups. Senior citizen groups are always looking for presenters to attend their meetings and these people quite often have excess cash in CD's or IRA's that make them a natural lender.

Having private capital resources is critical to the success of the serious creative real estate entrepreneur. Even if you desire to use your own money, it never hurts to have another source or two available. If your funds are tied up, and a great deal comes along, you can immediately jump on it.

If you follow some or all of the above marketing suggestions, you will have people with money seeking you out to lend you money for your next deal.

I invite you to learn more about Private Money Lending and get my new FREE 20-page ebook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by clicking here http://realestatewealthtoday.com/FREE-eBook.html .

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive
your FREE Real Estate Wealth Newsletter go to Private Lending Presentation Kit.

Don'ts

Advertising on Craig List - I do not recommend that you advertise on Craig List. It is too public and there are state and federal watchdogs looking for people who may be violating securities rules. I have said on many occasions that I do not recommend any advertising that is on a national scale including your own web site. This kind of advertising will get you into trouble with securities regulators and may be considered a securities offering to the public.

I know this from personal experience. Several years ago a person responded to my Craig's List ad requesting information about my investment program. After several emails, the individual said he was ready to invest and I directed him to my title company to prepare the appropriate documents. Strangely, I never heard from the individual again after that.

A short time later, I received a "cease and desist" letter from the Pennsylvania Securities and Exchange. The letter had several direct quotes from the emails I had exchanged with this individual. The State did not fine me, but asked that I never advertise on Craig's List or on my web site. Needless to say, I am complying.

Guarantee - Do not use the word "guarantee" in any form in any of your advertising. Do not use the word "guarantee" or ever imply that somehow your investments are "guaranteed". This is a sure fire way of attracting the attention of the wrong people. You may say your investments are secured by real estate, which is accurate, but do not use the word guaranteed.

Do's

Schedule at least one breakfast meeting per week - This simple advice might be the best and almost certain way to attract large amounts of capital. Schedule a breakfast meeting every week with someone who has extra cash available and is interested in your lending program. You will not get everyone to invest, but the chances are you will get enough to support a reasonable real estate buying business. At these meetings, be sure to ask the person for the name of at least one other person they know who might be interested in your programs.

Hand out 5 to 10 business cards per week - Again, this simple but very powerful advice will ensure that you have plenty of people on your prospect list. These are the people you have breakfast meetings or schedule a group meeting with. Everyone you come in contact with may be a potential lender. Do not overlook people just because they do not fit the perfect profile. You would be shocked that people that you would never think of as investors may become one of your best clients.

Del Val Property Management

My brand new eBook titled "Private Lending Secrets for Real Estate Investors" is a 76-page eBook that I wrote for developing your private lending program to find prospective private lenders in connection with buying, selling, and wholesaling real estate properties. Did you know, that investors like yourself tell us that "Finding the money" to buy property is the #1 problem that holds them back from making big profits in real estate?

For more infor please Click Here!