One of the most difficult issues for real estate investors starting their own private loan program is who to ask to be an investor. This can be very imitative at first, but like so many things, once you get started, it’s not as bad as it may seem at first glance.
Finding private money is not as difficult as people think. We recommend a number of discreet person-to-person marketing techniques, but by far the best method of marketing is simply talking to lots of people you may already know in your own community.
You should always think about who you know who might be interested in investing in your real estate investment business as a private lender. Always be on the lookout for the opportunity to deliver your “elevator” speech. Explain your program to anyone who shows an interest. Many of your best prospects will not be rich. Offer to mail information to anyone interested or, better yet, schedule appointments whenever possible to further explain your offer or to hand over your pitch kit.
Here is a “warm” list of potential investors who might want to invest in your real estate investment business:
- Friends, family and relatives
- Business partners, employees, contractors, vendors, and other professionals with whom you routinely do business
- Fellow attendees at seminars, conventions, and retreats
- Sellers, Equity Homeowners, and Retail Buyers
- Entrepreneurs, investors and real estate owners
- Entrepreneurs, executives and professionals you know
- Church contacts and friends
- Neighbors and friends of neighbors
- Members of your REIA, Chamber, Rotary Club, etc.
- Contacts made while traveling for business or pleasure
- Retirees, retirement plan owners, or IRA holders you know
- Your internal buyer/seller tracking list
- Your entire internal contact list
One of the keys to finding private lenders (like all marketing) is to make sure you follow up on any warm or hot leads and make sure you send them information or push for a one-on-one breakfast meeting. At that meeting you’ll get 30-45 minutes of uninterrupted time to discuss all the benefits of your program and why it makes sense to invest in you.
Set a goal of 3-6 meetings per month to motivate yourself and it will help get things moving much faster. Follow up after appointments with phone calls, postcards, and letters.