Now that the mortgage market for buying investment real estate is all but dead - investors need to have other sources available or go out business. The answer is private lending. Here are the four top ways to attract and develop your group of private lenders including (1) Private Lending Group Presentations; (2) One-on-One Meetings; (3) Out of Town Prospects - Creditability Kit; and (4) Existing Private Lenders.
Copyright (c) 2008 Michel Lautensack
Now that the mortgage market for buying investment real estate is all but dead - investors need to have other sources available or go out business. Fannie and Freddie will no longer be available for investor mortgages, traditional banks and saving and loans will not touch investors loans for many years to come and hard money lenders, when available, can have total cost over 25%. The answer is private money raised from people, not banks, through a process called private lending. Here are the four top ways to attract and develop your group of private lenders.
Private Lending Group Presentations
A private lending presentation involves getting 5 to 20 people into a room and doing a group presentation where you lay out the details and benefits of your private lending program. This may not be for everyone depending on your comfort level of talking in front of a group of people. But there is big advantage of doing group meetings. When people start to ask questions and tell positive stories a certain level of group think starts to take effect and can be very powerful on the attendees.
One-on-One Meetings
If you are not comfortable with group meetings - one-on-one meetings are a great alternative. I generally recommend a breakfast meeting in a quiet restaurant where you can have 15 to 45 minutes of time with your prospect. Like the group meeting you need to lay out your private lending program's details and benefits.
Out of Town Prospects - Creditability Kit
If the potential prospect is out of town you will need a good creditability kit you can send in the mail. It is very important to follow up two or three days after you send the package to see if they have any questions. Even if they do not participate right away, keep in contact and they may invest some time down the road after a number of follow up contacts.
Existing Private Lenders
If you already have a private lender, or lenders, be sure to keep asking them if they would like to participate in more deals. You will be shocked that most investor only give a very small investment to start and wait to see how things turn out before giving you more money. So keep asking and do what you say you are going to do they will develop a better relationship and trust level with you. As the relationship grows they will invest larger and larger sums to grow your real estate investing business.
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