Possible Private Money Lender?

The best way to approach some one is to have a professional presentation of some sort, or a hand out, like a mission statement, future projections, even a portfolio of properties you will target. The more professional you look, the better your chances are of getting money from ANY private party. Think about it, would you lend money to someone who didn't look legitimate? Makes sense right? I have a ppt presentation I use. Hope this helps, best of luck!

Here is a little letter i handed out to some people I knew that had money.
Since you know this person well I would say just use my letter to get an idea on what you want to say to her. add and take out lines until you get what you want.

letter:
Have you ever thought about investing in real estate? Real estate is the best and safest way to invest your money,especially in the current market. The stock market is a scary place to put your money these days and the bank doesnt give much in return. Why not make you savings earn high interest in a short time. Your return will be incredible in a short period of time. I am currently adding cash clients to my list of financial resources that want to invest in a high return market.
In the agreed upon time frame you collect your money with your profit on top.
I will pay 10% interest only on a monthly basis on the money invested.
within a 1-year period I will cash you out. That is a lot more than your money is earning right now sitting in the bank collecting 1-3% interest.
Will you make 10% monthly on your money during a 12 month period in the bank?
( the amounts loaned are obviously negotiable)
PLAN: My plan is to buy REO homes 50% below FMV ( Fair Market Value) using the strategies I learned. I will then fix up the homes and resell them below the going rate on simular houses in that area for a profit.
Some homes I will buy and hold for cash flow, in which case I will cash you out within the 12 month period. I am also offering partnership on projects where we will split the profits.
This is a great opportunity for both of us to make a lot of money over the next few years with no sweat or effort on your part!
About me: I have been a student of Dean Graziosi's, he is a self made real estate millionaire.
I am up to date on all the new buying technics and strategies that Dean has established and teaches to his students.
Over the next 3 years I will be making more money than ever before by buying and selling property I get at low prices and fix and flip for high profits.
I will of course work with promissory notes and use the property as collateral with you as first lien on it so you are secure in getting your money back.
If you are interested in making high profits on your money please contact me.
XXXXX

XXXXX
feel free to use and tweak it as you see fit.
I hope this helps someone.
Richie.

Has this worked for you in the past?

This seems like a pretty jam up letter you have. I do like it. I definitely know with some of the information you gave in that letter will surely convince this lady to invest full time with me.

Thanks Again!

let me know how everything turned out.That was some valuable info there.Good job b.c

don't you bring her a deal? Find one that you want, run the numbers, the rehab, the holding costs, FMV etc. Did you listen to the call last night? Dean said, and so did Matt, you should have all your info in place instead of just an idea or a house but no numbers on it.

I was actually gonna keep quiet until everything was officially completed but I do have a "unofficial" deal right now and I have everything lined up (numbers, rehab, holding, commissions etc) but I won't say anymore until it actually closes.

But yes I have thought about just taking this to her and presenting everything and show her how it's gonna work but I still have a few other options I'm considering at the moment.

Marlon you all be be the first to know if she comes on board but I will NOT get my hopes up to high. I don't wanna go in and have my head held high thinking it will be an automatic yes but with these types of ROI's I don't see why she wouldn't but I will only know once it's all said and done.

Wish me luck! LOL!

I do agree with Cathy as far as finding a deal and doing the numbers and putting it on paper. If you can show her the deals end numbers it will help.
Make sure you can put the finished product on the market well below any comparable properties in the area. That will help you sell quicker since you will have the best deal available.
good luck!
Never EVER give up!!
Richie

Gonna get the hopes too high but yes you both are right about presenting the deal with the numbers in line and the more you talk about it the more it makes me wanna go give everything I have lined up and show her NOW! LOL! But I want to weigh the options and see what's truly best to do.

Chase,

Elena has a good point with the presentation, but it's not always necessary if you're a personable guy, and good at explaining. Although I know people like to SEE numbers. Here's how I would approach her:

- Maybe bring it up casually and start the conversation that way.

- Let her know what you are doing and see if she gets interested. If she doesn't seem interested then try to change her mind, but don't be pushy. If she seems interested, ask if she would ever consider privately lending money, then continue to explain all of her benefits.

- Answer any questions she has (this part makes it important to know what you're talking about).

- Also, have confidence! Thats a very important part, since you wouldn't lend your money to someone who wasn't confident in what they are doing.

- If all else fails and she still says no, just be very kind and thank her for her time. This way you can come back when you've done a few deals to see if that changes her mind. And maybe next time come back with a presentation.

Also, how did you find out she had a bunch of money? This might be a concern to her if it is brought up randomly.

Note that I haven't done this, so I'm not saying it will work. But if I were in your position this is how I would approach it.

Ask your friend to partner with you to add more leverage. Then both of you can do the presentation to his grandmother. Most private lenders lend there money with an interest rate from 8 to 15 percent. Then you and your friend will split the profit 50/50/ Blessings to all. LA

Chase I know how your feel. I have a brother in law with lots of $$$ too, and Im at a loss about my approach. He is in tune with ROI, is a stock market guy , and would probably jump at the chance to earn more. Anyway, this thread was VERY helpful, and please keep us posted young man!

Steve,

Like your brother in law, I also am a trader as my main job. I know how they think, and you are dead on about wanting to make more money. Half of the guys I work with are all "for" real estate, and half of them are against it. It just depends on what they know and what they have experienced. Traders are constantly listening to the news, so that can affect their opinion on real estate in a bad way (since all you hear are bad things).

I'm sure that if you give him the right numbers and present a deal he would be willing to jump on it.

Hope that helps and gives you some confidence!

For those of you that are trying to figure out how to approach people you know or are related to about funds.

Some will be offended so you have to put a different spin on it.

What you should do is put all the information together include a deal if you have one.

Now go to this person and say I know you are successful in business and I would really appreciate it if you can look over my presentation and tell me if you think it is good enough to take to potential investors. I really value your opinion, and would like you to be honest with me.

Stroke their ego,now you are there for their advice not looking to get in their pocket. So if all of your material looks professional and they look for ways to make more money you just gave them the opportunity to offer.

But if they don't do not ask, leave one of the two copies you went there with and say I'll leave this and if you think of anything I should change would you give me a call please.

Now they have something to keep looking at and it will stick in their head and they will have it there to keep going to every time they think about it.

Wait a few weeks if they don't call you, now you can call and bring it up,ask if there is anything I should change.

Oh by the way would you consider investing with me. Bingo.

Thanks for the advice. I mean I was at a loss for words when I wrote this so any suggestions that everyone provided is greatly appreciated!

For the case of me finding out she has a freakin boatload of money.....well my friend told me what she does/did and even told me how much she's worth. Yeah him and I are pretttyyy cool almost like brothers so he didn't mind. LOL!

All I would say is take what information you have here on this post and search DG.com for everything else and just go for it. You say he knows numbers, ROI's, that's pretty much all he needs to hear.....with a little real estate thrown in of course. But I see you have an amazing opportunity here, so line everything up and go talk to him.

Just keep it short sweet and to the point though you don't wanna talk his ears off......so to say.

Good luck!

I like your idea very original I know that I would definitely not thought about that.....EVER. Will definitely have to go over everything and see what I come up with.

I also happened to find out that my mother is BEST friends with a divorce attorney! ($$$) She's known him for about 20-25 years now and I definitely know this is another great possible PML!

WOW! If I keep this up well.....just say the sky is the limit!!

Based on your second sentence

"I have a good friend of mine who I've known for a long time now and come to find out his grandmother (which I've known about the whole time)"

I am lead to believe while you've known this guy a long time he isn't a consistent friend that you keep up alllllllllll the time. Same with Granny. If a 'friend' i've known since 6th grade, whom I haven't seen in 15 years + approaches me about investing in real estate when they're in the same boat as you every flag in the spectrum goes off.

What I strongly,..........STRONGLY, suggest you do is ease into this. Anyone will be defensive if you come to them for money and they haven't seen or spoken with you in some time.

I would take your time, work on whatever deals you presently have, give them unofficial updates, let him get interested, and then bring his grandmother into this. Remember our sales convo??? Take your time with this.

That's your best bet I believe.

Elix always good to hear from you. I never really considered that but you do make a good point.

Thanks again!

Chase Im glad you started this forum. Many of us see these opportunities with fam and friends but are hesitant to approach them. Very good advise from everyone from different perspectives...food for thought.

Jimmy K : I thought your post was a very sneaky (good sneaky)way to get them thinking and hopefully talking to us about RE. Reminds me of the frog in cold water vs the frog in boiling water. It gives them a chance to "come up with the idea". kuddos to you my friend

This was a lot of info for me to use and very very helpful. I don't have someone with money I know but if I did your help has answered a lot of questions for me. I think Jimmy K's approach was very professional since we are doing a business and not asking for a hand out. We now have to change the way we approach things as we are now in a profession where we have to cross our t's and dot our i's. Someone told me once that the richest people in the world are paper pushers. There is some truth to this saying. Again thanks for the info and everybody that contribute.
Tony

You could also tell them "you know they have been successful in business and they have a lot friends. I have an opportunity that I have been working on and I'm looking for a few people that might fit the criteria, would you happen to know anyone that would be interested". This way like Jim said you're asking for their advise not their money.

Another thing you may want to consider is making sure that you have a team put together that can handle every aspect of the transaction. I have been able to do many larger deals, not because of skills I personally had, but because I surrounded myself with people who had management skills, accounting skills, and so on. If you have a team that is very skilled, they may find you the deal, have the business plan set up already, and have a presentation for you to take to your contact. This may sound like you are just piggy backing on someone else's project, and that can be exactly what it is, as long as you're bringing the money contact, that is sometimes the most important part! Even if you only work in a 15% or 20% equity position for yourself, it can be very much worth your while.

Grasshopper How have you been? I haven't heard from you in about a week, you need to call me I have some contacts in Macon to pass on to you.