Re: private investors needed! - Posted by Zack W
Posted by Zack W on March 02, 2005 at 22:58:56:
It is not easy but completely possible.
1] First you need prospects, right? You need to target people who CAN, if they decide to, give you money. Some ideas are relatives, friends, co-workers, doctors, dentists, lawyer, accountant, neighbors, etc. Once you have a couple prospects you need to know what to tell them.
2] Create a plan for both you and them. Exp - [You] Buy houses in need of repair at substantially less than fair market value. Renovate the house and resell it quickly to an owner occupant for a profit. We call this retailing. [Them] They lend you money at 10,12,even 15% simple interest for a term of 12 months. You pay them interest only payments monthly, quarterly, or whatever you agree to. You promise them you will not ask for more than 70% of the after repair value ensuring their loan will be protected by sufficient equity should the deal go bad. You give them a title insurance policy, a homeowners insurance policy, a 1st mortgage position, a persoanlly signed promissory note and appraisal on the property. You also share your plan with them as to what you are going to do to the house i.e. buy, fix, sell.
3] Turn plan into marketing tool. Now that you have a plan convert it into a marketing tool you can use to recruit private investors. Create an Introduction to your opportunity explaining what it is you do and what you can offer them. Jazzz it up with questions like “Are you happy earning 4.9% on your CD’S, if not I can help” Stuff like that will keep their attention.
4] Put this Introduction packet in the hands of all of your prospects from Step One.
5] Wait for the calls. Prepare a prsentation to sell this opportunity to your prospect. It would also help to create a package building credibility for yourself, for instance a credit report, list of assets, previous deals, referall letters, employment info, whatever you have that makes you look good should be included.
6] Present the opportunity educating your prospect on what Private Lending has to offer.
7] Pay pay pay them back and do another deal.
This is a brief summary of what you should do. I have successfully raised over 1.3 million in priavte money in the last 18 months. Here is what I did. I found two people, 1 started me out with 100k, he is now up to 500k, and the other started me out with 50k, then 100k, then I showed him how he can make money by raising money from other people. He has since raised over 700k from family and friends and takes 3 points off of every deal they do with me. Half of his people use their IRA money and run it through Equity Trust in Ohio. This guy now makes about 50k a year rasing money for me, sweet isn’t it?
Good luck. Private money is an amazing thing and will make real estate investing so much easier once you find it. Also keep in mind, if you find a deal, I mean a real money maker, the money will always be there.