Finding Private Lenders
As a real estate investor, it’s important for you to have definite funding and reserves. Real estate requires a lot of time and money, after all. One of the most used resources of funding for real estate deals is private lenders.
Private lenders have slowly become a very important factor in real estate deals. Not only are they easy to work with, you can just reach them any time and you get your funding with no hassle and paperwork. Private lenders work directly with you and you don’t run in circles just to get a loan from them.
Finding private lenders isn’t that hard to do. It’ll all depend on how you approach them, and the right way to approach them is to be open about your deals and how you go about with your programs.
First stop is posting ads and advertising to generate leads and audiences to your luncheon meeting (it can be other forms of relaxing conferences and not a luncheon). It is recommended that you target people who have the necessary means to give you a funding. Go over the yellow pages or the Internet. You can also call a list broker for names of private lenders. It is also better that the people you target have CD’s, or Certificate of Deposits.
Once you’ve established your target or leads, send out an invitation for them to join your luncheon. You can also send some information about what your luncheon is going to be about and when and where it’s going to be held. It is advisable that you don’t put the exact time for the luncheon. You can just put in the date and the location. This is because you would want your audience to come of their own free will and not pressure them to come at this exact hour. Keep a relaxing atmosphere as much as possible.
Make sure you get an approval for your ads, of course. You should also avoid all that “I guarantee you” and “low risk” talk. Businesses, and real estate deals, are mostly made up of risks and no guarantees. You should be as truthful as possible to your private lenders if you want to have a smooth relationship with them.
Settings like luncheons are much more preferred when finding private individuals. This is because a lot of synergy can take place in a luncheon. It is better than a one-on-one conversation with a potential private lender. The audience will be able to take notes and comment on your presentation, and share ideas and knowledge with each other. You’ll be able to liven up the mood better and show them your confidence and capability to control deals. The conversion rate would be higher and you’ll have a lot more private lending resources in a short time.
Dress properly and come prepared. When presenting your private lending program, you would want to be specific with your audience. Show them how you do your real estate deals; tell them which types of houses to buy, which ones not to buy, how to renovate, and so on. Stick closely to your agenda and organize what you’re going to show them and what you’re going to say.
Finding private lenders will be easier than getting funding from banks or hard money lenders. Banks have a lot of requirements and are strict with their policies. Hard money lenders can get a lot of money out of you when asking a loan from them, which is the opposite of what you would want. With private lenders, on the other hand, all you have to do is find them and build a strong trusting relationship with them. Then they’ll just be a phone call away!
