Timing is everything in life.
A wise man once said that.
My dad (who is wise) said that to me a long time ago. But I’m sure he wasn’t the first person to say it. And I’m sure when he told this to me he did not have private money lending in mind.
There’s nothing more important to pulling in private money lenders then timing.
- Timing of your marketing (when pieces are mailed, when follow up is conducted)
- Timing of the funding for the deal (fast close or long way out, managing the relationship)
- Timing for the private investor (life events, retirement, all come into play)
Timing for The Private Investor
If it wasn’t for good timing, on many occasions I would have lost out on more than a few private money deals.
In recent memory, the crumbling stock market of late 2008 – mid 2009 was the biggest boom to my private money raising efforts. The fear and pessimism on Wall Street and Main Street created a perfect storm of a problem that my investment opportunity solved.
Also, in my local area, the auto company re-structurings (much of it forced by government bail out dollars) gave a lot of Big 3 workers buyout money. What better place for these funds than to earn double digit returns in real estate? Or, perhaps just as good, pick up an investment property or two and turn that $100k into $200k or more in short order.
Timing can also work against you in raising private money as well.
For example: life events, such as kids going to college, divorce, health care issues, job changes, relocation. All of these events can prove to stop a private money deal dead in it’s tracks. If your lender is going through (or approaching) any of these situations, start taking preventative steps in your business.
Looking for timing of events can
- Do you know somebody or of somebody that is recently retired?
- Do you know somebody who just sold their company?
- Do you know somebody who just got a big payoff of some kind? Maybe a settlement?
Tap into these source by: acquiring mailing lists, compiling your own mailing list, leveraging referrals, networking.
Timing of Your Marketing
The timing of marketing and sequencing new private lenders is very critical. Try to avoid having mail land on Mondays. Don’t market around major holidays (unless you are leveraging the holiday in the promotion). Don’t market during heavy public awareness of global events (such as the recent Japan earthquake or, years back the U.S. war in Iraq or 9-11).
Timing is important with follow up marketing, meetings and scheduling deal closings. Schedule your mailing too close and you’ll depress response, too far away and people may forget about you and you will lose momentum/recall from prior mailing.
Timing For Funding The Deal
This can be tricky. Especially when you are using the ‘ready-fire-aim’ approach (that I like best). Meaning: you are raising money even with no immediate deal or placement for the funds. You want to have money at the ready and not be scrambling for it. But this means you’ve got to manage the private lenders expectations and help them with the timing of their funds, particularly when Self-directed IRA’s are involved.
I’ve found that giving a prospective or new private lender a detailed time line or their own “investment calendar” will give them the guidance needed (along with your words) to get the ball rolling and have funds available when the closing is ready.
Look for the Opportunity
There’s a ton of capital out there on the sidelines and actively invested that you can tap into. Keep timing at the top of your mid and you’ll better be able to seize opportunities as they present themselves.
Event timing with: retirements, rollovers can be especially beneficial. Recent or pending retiree lists or IRA holders at specific ages are good targets. Empty-nesters who are looking for second careers or businesses can be good joint-venture partners. After all, timing is everything.
-Happy Investing
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