Private Money Lender Loans- Investing Just Got A Whole Lot Easier
By Tom Dunn | September 20, 2008
There has never been as effective a financing method for investment real estate deals as the one I will discuss in this article. Whether you are an experienced investor or a complete newbie, you need to take a few moments and read these few short paragraphs, because they will introduce you to a powerful and creative concept to fund almost any type of real estate transaction. Using this technique, you can gain an unfair advantage over more experienced investors, and gain access to nearly unlimited capital. Here are a few beginning steps to prepare you to build your very own real estate private lending group.
Initially, you will start by sitting yourself down in a comfortable place and writing out your investment plan. No, I don't mean you need to pound out thirty pages, but just a short, specific, on-point business plan that will let prospective lenders know you and your business. How do you plan to invest? What types of properties? Will you buy and hold or flip? How will you profit? What kinds of discounts will you realize? Think like a potential investor and answer their questions before they ask them.
You'll need to take your time with this and not rush, because it will pay off for you later. This plan you are writing will become the foundation for two more components of the system- your elevator speech and your seminar presentation - which I will cover in a future article. Make certain you are not long winded, and you are specific, and keep your potential lender in mind as you work. It may even help for you to think of one specific person as you write, and write TO that person. Add details about deals you have already done if you have any. If not estimate, but do so conservatively.
The next step is to create your potential private lenders list by writing down the name of each and every person you know. You'll make no judgments about worth or lending ability, just follow one simple rule- if you know them, their name goes on your list, whether you have known them for one day or thirty years. If a name pops into your head, write it down, and get help remembering who you know from friends and family. Work towards the most complete, extensive list possible.
You don't want or need to hurry this step. Slow down and get a good start on the list, then set it aside for a couple of days to let your subconscious go to work. When you pick it up again, you will be astonished at how many new names you've remembered. Lastly, keep the list with you constantly for a few days, and put any name you think of down immediately.
Now that you have a complete list of people you know, it's time to add their addresses and/or telephone numbers. You want to have at least one good contact method for each contact. You can use either street addresses, email, or phone, but you want to make sure your information is current. As soon as you begin contacting them, you won't want to have to stop because your contact info is bad. This step makes the rest of this process go very smoothly.
The final step in this preparation phase is to write a letter. You're going to take the business plan you created in step one, and write a letter to your list of contacts that briefly explains the kind of investing you do, how you plan to profit, and why you're contacting them. Be specific, and tell them you are looking for private money for real estate investing, and you would like them to consider being one of your private lenders. Put your self in their shoes as you write, and give them all the good reasons why they would want to be one of your lenders.
Don't let fear stop you from doing this, but take your time and do it well. Even if you have to rewrite the letter several times, it's worth all the effort to get it right. This letter will become the backbone of all your future private lender efforts. Think of at least five benefits your lenders will realize by loaning you money, and be sure to include them in your letter. Get your letter in tip top shape, and you've completed your preparation. You're now ready to go out and start finding private lenders to use for your real estate deals.
Topics: Investing |
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