A Key Private Lender Negotiating Tactic
By · CommentsHow I only wish every single private money deal went perfectly according to plan.
Sometimes they do. Other times…well…let’s just say there’s a reason why they say “nail biter.”
Today I want to share a negotiating tactic with you that has been successful for me. Like most things that work in business, it’s more simple than complicated.
Bruce Lee, the great martial artist, was once quoted as saying: “It is not daily increase but daily decrease. The height of cultivation always runs to simplicity.”
Write that one down.
Onward…
Now, a response you may hear from a prospective private investor is something along the lines of: “I’m not sure.”
This can be a real killer. It can take the wind out of your sails. If you prepare for it ahead of time, you can prevent this momentum stealer. Here’s how… Read More→
The Real Story with “Joint Ventures” and Private Lenders
By · Comments“Joint venture” is probably one of the hottest and overused words in all of business.
I’d like to shoot the person that invented the term.
But it’s here with us to stay, so in that case, we might as well figure out a way to deal with it. It just seems like everywhere I turn around, somebody has a joint-venture for me. Most of these so called joint-ventures are one-sided: like I take all the risk and the person proposing the JV has all the upside. Here’s a good one for you:
“Adam, how about I find a deal for you and you bring the money to fund the deal from your private investors. You guys can manage and rehab the deal and we’ll split the profits?”
Whoa! Where can I sign up?…..NOT! (i love bringing that term back whenever I can)
It’s more like: “how fast can I run the other way!” Why? Because this isn’t a “joint venture” and it’s not something I’m even remotely interested in. So, here’s what I told this person: Read More→
Equity Partners for Private Money Deals
By · CommentsOne of the best ways you can profit handsomely from real estate investing is to set up private money partnerships.
As I’ve said before, you should always look at two sides of the private money coin: lenders and equity investors.
If you only think in terms of private lenders, you’ll be limiting yourself to only those people who want to loan money secured by real estate for a fixed return. I guess that’s not bad, right?
Wrong!
Doing this will severely limit the amount of private money you can get. Read More→
Did you know: Theodore Roosevelt was the only U.S. president to deliver an inaugural address without using the word “I”. Abraham Lincoln, Franklin D. Roosevelt and Dwight D. Eisenhower tied for second place, using “I” only once in their inaugural addresses.
Why is this so interesting?
Because it has a lot to do with how successful you will be when pitching your private money deal.
(yes, I use the term “pitch” because….well…that’s pretty much what it is)
For anybody that’s had any sales training, one of the first and most important things you learn is that the person you are trying to sell to doesn’t care about you (using the term “I) a whole heck of a lot. The prospect only cares about “what’s in it for me.” Thus, it is commonly said that most people tune into radio station WIIFM (what’s in it for me).
If you pay attention during the next conversation you have today, be conscious of how many times the other person uses the word “I”. This is a big indicator about how they see things – and how they prioritize in their head. On many occasions a salesperson will call on me from a major company, looking to gain business and there just doesn’t seem to be anything on the top of the salespersons mind other then themselves or their company and how great their company is
What about me?! Read More→
Winning Approaches to get Private Money
By · Comments“Is that it?”
Those aren’t the words you want to hear after you’ve just made your private money “pitch.” The words you want to hear are (in order)
- Can I write you a check right now?
- Is there any way you could take more money and invest it for me?
- Would it be Ok if I told some of my friends about you who are looking for this type thing and have money to invest?
If you want to hear the those three questions (or similar ones) and not “is that it?” or “what else do you have?” then this will be an important message.
You see, most people, for whatever reason, don’t “leave it all on the field” in any aspect of their lives – let alone their businesses.
A long time ago, my football coach used to tell us that we had to “leave everything on the field.” Before each game, he would get us pumped up. We were prepared. The game plan was in place…but he always took the time to tell us that we had only once chance to play this game because we had one life and that we must leave every ounce of energy, passion, enthusiasm and drop of willpower out on the field. In other words… Read More→
“Adam, what’s the one way to get private money?” a man once asked me.
I thought about it for a minute.
Then, I thought about it for another minute.
And then another.
Until there was an uncomfortable silence in the room.
Soon the man who asked the question cleared his throat: “uh-hm…”. This pulled my attention from deep thought back over to him. During those few moments of silence, I reflected upon the private money I had raised (over seven figures, multiple times) and the deals I had done with private investors (hundreds) and I searched high and low the far reaches of my mind a good answer to his question.
And I came up blank.
But, I didn’t continue to sit in silence. Something d hit me. Like a ton of bricks. One of those flashes of lightening you get only when your brain is firing on all cylinders. And I want to share that with you today. Because the answer to this “burning question” is so valuable that it just might save you a couple months of weeping and teeth-knashing… Read More→
3 Great Ways to Build Investor Relationships
By · CommentsI’m going to take a little ‘time out’ today.
What I want to focus on is: taking care of private investors once you have them.
It’s very important that you do this the right way. In fact, it’s almost just as important what you do after a person places funds with you then what you do before.
Here’s why: your single biggest source of additional capital as you grow your business will be…your existing private investors. In fact, if you do it the right way, after you have 5 or 6 private investors (and it usually doesn’t matter how much they have invested) you should not have to spend much money or time with outside marketing for private money.
You should be able to raise as much private money as you need from referrals, testimonials and additional capital invested from your existing investor base.
Of course, you may have to go outside again with your marketing if you want to raise $5MM or $10MM blocks of capital, but for real estate investors that want to make a few hundred grand per year flipping properties or with cash flow – a solid investor base to start and then working off that base will pay huge dividends.
With that in mind, here are three great ways to build your relationship with a private investor after they place funds with you: Read More→
Once you get bit by the private money ‘bug’ – there’s no turning back.
Maybe it’s the goal of bigger profits. Maybe getting more respect and having every one of your offers or LOI’s taken seriously.
Or, maybe…just maybe…you like the thought of not having to crawl on your hands and knees and hope and pray that the mortgage gods of the bailed out banking industry will arbitrarily rule in your favor.
Maybe it’s all of the above.
Whatever your prime motivation is for raising private money, there cannot be enough said about the importance of building credibility.
Credibility is what makes the potential investor listen, really listen, to your offer and give it full consideration. Building unshakable credibility is absolutely vital when it comes to differentiating what you are offering vs. what other people vying for your private investors dollars are offering.
[don't tell me you forgot that a lot of other folks are pursuing your private investors' funds, did you? No? Ok, good...]
Back it up
Businesses of all shapes and sizes also fight the same credibility battle. Any time a claim is made (from pizza delivery to stain removal) the customer automatically puts up their guard. Because of all the advertising and marketing messages out there, people are naturally skeptical of any claim.
Bottom line: You have to back up any claim you make.
For instance: if you claim you can successful place a persons funds and successfully repay them with interest, you should never take for granted that you have to back up this claim.
Just because “the deal is good” is not enough.
Showing them your business plan or offering documents is a good start, mandatory, but sometimes that won’t even be enough.
However, no matter how much you say about you, it won’t matter as much as…
What other people have to say about you.
I’m talking about the irrefutable power of the testimonial.
The Power of Other People’s Words
Ok. That’s a pretty big private money marketing secret I just let out of the bag, so let’s dig a little further in. I want to make sure you fully understand what I’m driving at…
If you tell a potential private lender that you’re a good person, that they should do business with you, it will mean something to them. They will take it under advisement. However..
if somebody else (a 3rd party) says that you’re a good person and that people should do business with you (or invest money with you) the impact on the potential private investor is immeasurable. And, your credibility will SKYROCKET.
So, if you already have had a successful relationship with a private lender, you should create a way to approach them about giving you a testimonial. Do this right now while you’re thinking about it.
“BUT ADAM, I NEVER HAD A PRIVATE LENDER! I AM TRYING TO GET MY FIRST ONE!”
Ok. Ok. I hear you.But, guess what?
You can still get very valuable testimonials!
And this can help you quickly get private money!
That’s right. You can get testimonials from anybody that you’ve done business with that will say good things about you. And, here’s the really awesome part: you can get lots of testimonials because you are also promoting the other persons business who is giving you the testimonial!
It’s a total win/win.
Imagine the look on a skeptical private lenders face when they see a couple of printed pages with glowing reviews about doing business with you? Picture the skepticism melting away when you send them a letter with a people raving about how great you are.
You don’t even have to talk yourself up any more. Let other people do the selling for you!
[here's a big $ million $ tip: you should add a page to your private money focused website that features testimonials]
Man, I’m excited just writing this!
This is something that you can put to work right away in your business to tremendous effect. In fact, if you don’t take the time to do it you are just short-changing yourself in a major way.
-Happy Investing!
Use Specifics to Win Over Private Investors
By · CommentsWarning: this is a very important topic – so pay close attention. Implementing what I have to say here could mean the difference in hundreds of thousands in private money for you. Don’t believe me? Nonsense?
No.
100% real. Time tested. Battle tested.
You see…
Every time you communicate in any way with a private investor, you must always be working toward closing the deal.
You want to get the max bang for your buck. You never a second chance to make a first impression.
And there’s always a fine line to walk when talking to potential private investors: between giving them the broad 30,000 ft. view or going through minute specifics, such as the deal structure and closing mechanics…. Read More→
I hate getting nickel & dimed.
You know what I mean.
You go to your bank and you need a statement from 7 months back and they want to charge you $10…for printing out a sheet of paper. Or, you get charged fees for checking your bags on an airline or they charge you $10 for lunch on the plane, etc.
I was just at Panera this morning and they charged me $1.20 to get cream cheese with my bagel. $1.20 for cream cheese!
This fee pile-on bull**** is really getting on my nerves. It’s like these companies hire a consulting firm or a bunch of MBAs that see clear to boost revenue by 5% this quarter by creating a heap of ill-will from all of their customers. It’s just plain dumb. Just roll everything into one easy price. But, alas, that sort of simple and common sense thinking doesn’t crank up the billable hours for the consulting firms.
But I can’t shake the though of my bagel; it should have been $1.49 with cream cheese and they could have just rationed the cream cheese a little more. The worst car salesman is the one that tells the customer the total price of the car and add-on’s ($20,000 for the care, $1,500 for the sunroof, etc.), versus the successful car salesman that tells people the monthly payment amount and “for just $5 more per month you could have a sun-roof and power windows…”
Ok, anyway, I was going somewhere with this as it applies to raising private money. Read More→
