How to Get All the Private Money You Will Ever Need

There is a lot of information and even courses, seminars and boot camps out there on private money and I am sure it is because private money is one of the few sources that you can generate funds for your deals without having any previous credit, cash, income, job, debt ratio or anything like that. It is really a hot area right now. Private funds are very similar to hard money or rehab loans. The only difference is, instead of going through an institution or mortgage banker or broker, you are actually looking for individuals with money that would like to lend it out at a decent rate of return.

There are many different ways to generate private funds and to find the individuals. The first one that I would like to suggest is your local Real Estate Investors Association. Just go in and find out who the players are, who is buying and selling property, and just ask all of them who are the private lenders. In fact, a lot of times individuals, as well as mortgage brokers and hard money lenders, will be venders or corporate members or corporate sponsors of your local REIA group, and that is a great way to find them as well. A lot of people suggest having seminars and luncheons to find private money. I do not tend to agree with this, although you can do it, there are courses out there that teach how to do it. Are you looking for houses or are you looking for money? You really want to be looking for houses. So you want to go the fastest, cheapest, quickest way to get the funds to close your deal, so that you can concentrate on buying property and get your machine up and running.

The neat thing about private money is you do not have to be concerned about being self employed, what your debt ratio is, your credit or your experience, because the investor is basically investing their money in the property itself and with you standing behind the deal. The other neat thing about private money is once you have two or three individuals that are loaning you private money and getting a good return on their funds, these people tend to go in the same circles, so you are going to have other people contact you about loaning out their money to you at a good rate of return. That is really a neat thing, once you get to that point. In order to attract private money in the beginning, you are going to need a credibility kit or at least some information on who you are and what you have done, copies of deals you have done, copies of HUDs, where you have bought and sold property. If you have not done that, you need to team up with somebody and get a couple of deals under your belt, so you can build your credibility kit pretty fast, so you can actually show people deals you have done, how much you have made on the deal to show them that you are in business and you can keep their money safe while earning a good rate of return. Most private money lenders will allow you to borrow their money with interest only payments. Some will even allow you to make quarterly payments or annual payments. They are not generally going to be longer than 12 months though, because they do want to get their money back and turn it, as you want to be able to refinance the property and payoff the private lender or you also want to be able to put the property on the market and sell it, to pay off the private lender to get a track record going so you can turn around and borrow the money again.

Another way you can use a private lender is to just borrow the money for a twenty four hour period. You will do this when you need to close on a property to resell to your buyer the same day. You could offer your private lender around two percent of the loan amount for the use of their funds for one day. This is a good deal for you and for your private lender. As an example, if you needed $100,000 to close on the property then you could pay the private lender $2,000 for the use of the money.

There are a lot of different places to find private money lenders. You can look for referrals from people that are in CDs, investment advisor referrals, CPA referrals, attorney referrals, friends, and neighbors, people you go to church with, anybody you know that may have some cash or a portfolio that they would like to get a better rate of return on. The other area as well, is a lot of people like to invest their IRA money. You can get a self directed IRA at a company like EnTrust or Equity Trust and they can invest their money with you, loaning it out, secured by a Deed of Trust or a mortgage and get a rate of return that is greater than what they are getting in the stock market or mutual funds and it is in their IRA as well. It is called a self directed IRA. A lot of people target this market, specifically looking for people that have IRA money, but are not getting the kind of return that they would like. I have included in your book marks the websites for self directed IRA’s. Another way you might find private lenders is to buy a list of investors. You could buy a list from different list companies, like Dunn and Bradstreet or you could also get a list of subscribers to certain publications like the Wall Street Journal or Money Magazine or Smart Money Magazine. You can even separate those out into regional areas, which would be close by to you and you can mail them out a letter or postcard.

One of the most successful ways to find private lenders fast, and not a lot of people will tell you this, is to ask around your real estate club and in your investing community and some of the attorneys that are doing a lot of real estate closings, to find out who is using private money. Once you find out who is using private money, all you have to do is search the courthouse records and find out who the lenders are on their deals and there are your private lenders in your area. Then all you have to do is contact them and see if they would like to also become one of your private lenders. This is the best and quickest way I know of to be able to get private money. Here is another quick way to find private money from almost everyone you meet. Every time you meet someone new or see someone (even at the gas pumps or in the store or elevator, etc.) you simply ask them what they do for a living. Then when they reply and say for example “I’m an engineer” they will always ask you what you do for a living at that time. Then you simply reply and say; “I help engineers become wealthy investing in real estate”. Then this opens the door for you to tell them about what you do and how they can invest passively with you and earn a good rate of return. What a great idea and it is a very simple idea as well. Remember, private money can be exciting. You do not have to go to banks. You do not have to qualify. But, also remember, you are not just looking for private money, you are looking for houses.

Some Private Money Lenders are just as expensive as Hard Money Lenders, if not more. Just because someone calls themselves a Private Lender doesn’t mean it will cost you less than other sources like hard money. If you would like to learn more about how to raise private money you can listen to me interview the private lending expert Alan Cowgill at www.BrainPickaPro.com.

I hope you have enjoyed this article taken from my course called the Ultimate Buying and Selling Machine! which teaches how we buy and sell 5-10 properties a month, have them sold in less than 2 hours and never leave the office or look at them. For many more articles and a 10 part ecourse on how to create your own Ultimate Buying and Selling Machine! as well as over 50 training audio recordings you can listen to online, download and collect, simply go to www.LarryGoinsFreeOffer.com where you will gain instant access to all of this and 51 Exclusive Editable real estate investing Forms and Documents all FREE! You will also get two FREE real estate investing eBooks, A free Personal Coaching Profile to help you jump start your real estate Investing, FREE Nationwide Wholesale Property Listing Notification, FREE Weekly Training Teleconferences with Different Topic Each Week, FREE subscription to Larry Goins “Almost” Weekly Investing Newsletter, FREE Admission for Two to Investor Palooza 3 Day Training Event, FREE Admission for Two to Larry Goins 3 Day Boot Camp, Plus over 31 Exclusive Articles on real estate Investing and Much More! Just go to www.LarryGoinsFreeOffer.com. Thanks and I look forward to working with you, Larry Goins