Huh? Is that any way to approach business? Isn’t it careless?

To me there’s no better way to profit in this market than using private money to steal real estate bargains. But, there are some different ways to approach it. There’s a more profitable way and a less profitable way. It’s up to you to decide.

The best way to do it is to: #1 get the private money and then go after the deals. However, most people do the exact opposite. Why?

There’s no law saying you have to have a deal before you get private money. But, I think you’re going to be much more successful when you go out hunting if you have dry powder and plenty of ammo.

What it comes down to are two vastly different schools of thought when it comes to private money:

1.    Get the deal, then get the private money
2.    Get the private money, then get the deal

Seems pretty simple and not much different. After all, you are in fact getting a private money loan or private funding, right? So half the battle is already won. But…

There are huge differences – both in approach and results (remember, results = profit?).

Let me explain…

First, I’m going to let you in on a little secret, well..maybe it’s not so little. If you go through door #1 (you find a deal and then run around like crazy beating the private money drum to fund it), you may get good deals and you’ll bypass all the banking B.S. that has real estate investors from Boston to Seattle running around in a paper chase close to the abyss. – All of this is good stuff….But, you’re still going to leave a lot of low hanging fruit on the vine and miss a great many profitable deals.

These deals, this low-hanging fruit is going to go to investors who utilize the following approach:

Ready. Fire. Aim.

Get the money, then get the deals. This is how to make the most money in the least time with the least effort. Private money lenders are ready and waiting to jump on profitable deals…they’re sick of the stock market and private mortgage loans or private placement memorandums are perfect substitutes for the whipsaw of the stock market.

One thing you’ll note with my “ready. fire. aim.” approach isn’t exclusive to private money for real estate deals, either. You an adopt this approach to your whole business and you’ll get a lot more done. Stop over thinking things and ‘getting ready’ to ‘get ready’ – just go out and shoot something and bring it back in. Taking action always works wonders on profits.

The absolute best way to capitalize fully and completely on the current buyers market of the century is to first get the private money and then hunt the deals.

Just about every real estate investor, no matter if they’re going after bank owned foreclosures or  does this in reverse – they are conditioned for the old way of doing things: you know, where you could write an offer on a deal contingent upon financing and you’d have 30 days or so to put together a couple of banks or mortgage brokers for financing it. Since those days are long gone, cash is the rule of the day.

Even when you are acquiring bigger projects where you are using a component of commercial financing for a piece of it, you still need to have the equity part down before you snag the deal. Any reputable commercial broker or asset manager worth their salt is going to want to make sure that you’ve got the ability to close the deal before giving you the keys to the massive equity and cash flow kingdom that they have under their thumb with some truly ‘diamond in the rough’ offerings.

Having access to the capital will bring you the best deals. You can try it in reverse or you can  If you want to be the first person to get a call on a new listing – this is the approach. Private money lending and private equity investors are going to be what you need. Hard money and bank money won’t cut the mustard.

Some of the best investment managers, real estate or otherwise, use this approach. How do you think a big REIT would make money if they went looking for deals and then brought those deals to their investors? The deals would be gone and the profits might be lost.  So, why would you do it any differently than the most successful businesses in real estate?