| Want private money? Well, as you might have | | | | Third, your private lender is as skeptical of the real |
| figured out, you can't just walk up to a potential | | | | estate market as the general public and doesn't |
| private lender, tell him or her about your "deal", and | | | | necessarily think it's a "great opportunity". How is |
| expect them to write a check. No way. If you want | | | | your approach going to overcome those concerns |
| to be successful in raising private capital for real | | | | and in fact benefit from them? |
| estate, you have to learn how to "attract" private | | | | Next, anybody who has become wealthy enough to |
| investors to you. | | | | have capital to invest, did not get there by taking |
| So what's the secret? Or to paraphrase a famous | | | | excessive risk with their money. The reason why |
| movie title: "What do Private Lenders Want?" The | | | | lottery winners generally end up poor again is |
| short answer is: put yourself in the private lender's | | | | because they never learned this principle. |
| shoes, and think about what you would want before | | | | Or as Will Rogers once said: "When it comes to |
| you invested your children's inheritance is some real | | | | investing, I've always been more concerned with the |
| estate deal. | | | | return of my money than the return on my money." |
| Now, what I'm about to tell you may shock you. It's | | | | If you want private money, you need to explain to |
| not the "easy-no effort" seminar version that gets | | | | the investor, how he is protected from losing his |
| you all excited, but won't put a nickel in your pocket. | | | | principal and how he is going to get his money back |
| These are answers based on the experience of | | | | (ROI = Return OF Investment). |
| raising "real money" from "real private investors". | | | | And you must address the question of risk. Unlike |
| In other words, private investors and private lenders | | | | most people, private lenders have fairly low risk |
| are not "motivated" to invest their money with you. | | | | tolerance. If the risk level in the deal exceeds their |
| And you are not the only deal they see. On the | | | | risk tolerance, no offer of a return is going to |
| contrary, private lenders and Angel investors have | | | | convince them to place their capital with you. |
| many deals that cross their desk, and they are first | | | | And the Final and probably the most important |
| looking for an easy way to eliminate your deal. So, it | | | | consideration for the Private Investor is: "YOU". |
| is really important to know which buttons to push to | | | | Angel investors have a saying, "Bet on the Jockey, |
| keep their attention, and which ones not to push so | | | | not the horse". |
| as to avoid elimination. | | | | Think about it. Would you invest your money with |
| First, know this. Your private investors are walking | | | | someone you didn't know or respect, regardless of |
| around with an invisible antenna over their heads that | | | | how great the deal was? I don't think so. |
| is tuned to only 1 station: WIIFM or "What's In It For | | | | Are you a person of high integrity, who does what |
| Me?" Unless you can explain that clearly, quickly and | | | | she says she'll do? Do you have the experience, |
| concisely, you're out. Private lenders have no | | | | knowledge and expertise and the team to see this |
| patience for people who beat around the bush and | | | | deal through to a successful conclusion? And Trust |
| waste their time. | | | | me: No private lender is going to entrust you with |
| Second, as a sophisticated private investor, I know | | | | their capital, unless these questions are answered and |
| that not all deals are good deals, and not all good | | | | demonstrated to their satisfaction. |
| deals (e.g. good for you) are good for me. So, don't | | | | Now, due to space limitations, I can't go in depth |
| give me a canned elevator speech, and expect me | | | | here on these topics. If you want to pursue this |
| to be excited and whip out my checkbook. First, | | | | further, see the opportunity in the box below. |
| "show me the money." | | | | |