Private Money Lenders

Private Money Lenders

What is a Private Money Lender?

A private money lender is a company or individual that loans money, usually secured by a note and deed of trust or mortgage, for funding real estate deals. Private money lenders are typically considered more relationship based in comparison to hard money lenders.

Three places to Find Private Money Lenders

  1. Real estate investment clubs

Real estate investments clubs are a great way to find any part of your power team including private money lenders. Be proactive in networking with as many people as possible when you attend. The point is to let people know you’re doing deals and looking for more possibilities on raising capital. This is a great way to find out if the person you are speaking with is a private money lender. If they aren’t you may get a referral to people that are.

  1. Online searches

You can find just about anything with online searches. There are several websites out there that have lists of private money lenders or lenders that have their own website. A good place to start is www.privatemoneylendingguide.com and browse the lender directory. When contacting a private money lender, you could say “Hi, my name is John Doe and I found your information on the Private Money Lending Guide directory website. I have a deal that I’m working on that I would like to discuss with you. Do you have a few minutes?”. If they have a few minutes to speak, this is the time to start asking any and all questions about the potential loan you need (points, interest rates, terms, etc.) and how the lender operates. If they don’t have enough time, schedule an appointment with them so you’ll have the time to discuss things.

  1. Referrals

I briefly touched on this with real estate investment clubs, but don’t underestimate the power of referrals. Typically, referrals come from people you trust that have had dealings with the private money lender they are referring to you. The great thing about referrals is you can get them anywhere. Family and friends, co-workers, social media (LinkedIn, Facebook), Realtors, etc. The old adage goes “if you don’t ask, you don’t get”, so don’t be afraid to ask for what you need.

Using these methods can help you find the private money lenders you need to make your real estate business a success. Having Private money lenders lined up can also give you confidence in your deals knowing the money is there when you need it.

Networking by Attending Foreclosure Auctions

Networking by Attending Foreclosure Auctions

To most people, being a real estate investor is all about making a lot of money through buying and selling properties. Although that idea of real estate investing is not far from the truth, there’s more to it than that. To make it to the top, real estate investors need a lot of help from other people inside the real estate industry. That’s where networking comes in. Networking is the inexpensive method of establishing friendly and professional relationships with other people in order to increase their number of business contacts and future prospects.

One of the many networking events an investor must not miss is a foreclosure auction. Attending foreclosure auctions does not mean you have to join in the bidding. Instead, just get to know people. Because foreclosure auctions are a great way to acquire properties below market value, they attract a large numbers of local and non-local investors. You’ll meet serious buyers that are fast deal closers and pay with cash. These are the people you’ll want to network with and put on your growing lists of buyers. If you know someone attending a foreclosure auction, ask him or her to show you around and introduce you to different people.

For beginners or even seasoned real estate investors, having a database of people from the same business is very important in building a career. As like many other industries, the more people you interact with, the more business prospects you will get. It’s practically impossible to run a real estate business without the right contacts.

Referrals

Establishing strong business connections with the right people can be beneficial when starting in the real estate world. Accumulating a large network of real estate agents means getting many business referrals.

Mentorship

Business networking can offer a variety of opportunities such as being educated and mentored by people who have already made a successful career for themselves. Learning from these people with varying talents and techniques can help you and guide you in becoming a success investor.

Potential Business Partnerships

Networking is also a great way to meet other investors that could become potential business partners. Investors work, help, and makes deals with their fellow investors, so keep in contact with each other.
Meeting Service Providers

Reliable contractors can easily be found if you just ask around. Since most properties in foreclosure auctions are not in good shape, a skilled and trusted contractor is someone you want to have on your networking team.

Real Estate Investment Clubs

Real Estate Investment Clubs

Real estate is not a property business; it is a relationship business. In order to be successful in real estate, the new investor needs to build a network of other investors and real estate professionals. There are many ways to accomplish this task, however, attending real estate investment clubs is a good way to jumpstart the networking process.

Real estate investment clubs are typically held one night a month and are free to attend for the first time. After the first attendance, you will either have to pay at the door or become a member. It is recommended to become a member as there are benefits to members that exceed the cost of the annual membership fee.

There are 3 main reasons to regularly attend investment club meetings:

  1. Find other cash investors to work with
  2. Network with professionals that will support you in your business.
  3. Learn about the local market.

Finding cash investors is crucial to building a successful investing business. Many times, homes are bought and sold through/with other investors. Most investors will not buy every deal they come across therefore, the investor will sell the property/information to another investor using a wholesale technique. Having a network of cash investors provides options to get a deal completed.

An investor is an expert in buying and selling property. They are not experts in taxes, legal issues, keeping the books, insurance, property management, and other facets of real estate. Therefore, the investor should surround himself/herself with professionals to take advantage of their expertise. In doing this, the investors time is freed up to focus on the business of finding, buying, and selling properties.

We all know the real estate market is constantly shifting. Techniques to find deals are continually evolving. A quick way to find out what is working in the local market is to attend investment clubs. Investment clubs are great places to share ideas, knowledge, and techniques that are working for the current status of the market. Many times, investors willingly share their techniques in an effort to find other deals. A successful investor’s belief is that there are enough deals out there for everyone therefore, the more people they help the more deals will come their way.

Remember, real estate is not a property business, it is a relationship business. A great way to build those necessary relationships is to attend real estate investment clubs.