How To Get Private Money For Real Estate Investing - Step Three

OK, you have taken the first two steps in the process of getting private money for real estate investing. First, you developed a Business Plan to give to your prospective lenders. Next, you created a Lender Fact Sheet, outlining exactly what you are looking for from a private lender. Time for Step Three.

The major question on your lender?s mind is, ?What?s in it for me?? Everybody asks that question when they consider parting with their hard earned money, and your prospective lenders are no exception. You have answered that question by giving them your Business Plan and Lender Fact sheet, showing them the rate of return they can expect. They have only one major question left.

How is my interest protected?

You see, people are motivated to do things, or NOT do them, for all sorts of emotional reasons. Fear is one of the most powerful. To be successful getting people to loan you private money for real estate investing, you must help them to see that they have nothing to fear by lending you the money. You must allay their fears and doubts.

This is accomplished by using a Security Agreement, both in your Lender Information packet (alongside your Business Plan and Lender Fact Sheet) and attached to every one of your private notes as they are created for each deal.

Your Security Agreement tells your prospective lender that their money is secured by the value of the real estate you are buying. In other words, they will have a lien against the title of the property filed with the proper government authorities. You will personally file the security documents in each and every private lending transaction, and you will provide certified copies to your lender. Their investment will always be backed by the real estate.

Since you have already demonstrated to them, through your Business Plan, that you have a track record of ALWAYS buying value, and NEVER overpaying for property, your prospect will be able to clearly see that their interest is protected, and they have nothing to fear.

Step three in getting all the private money for real estate investing you will ever need? Develop a Security Agreement.

For much more =>five steps to private money for real estate investing

Finding Private Money For Real Estate Investing

Have you ever wished you had all the money you could use for all the deals you could possible handle? If you?ve been investing in real estate for long, you certainly have thought about how you could find private money for real estate investing. In this article I?ll attempt to give you some ideas for doing just that.

The first thing you should do in your search for private money for real estate investing is know what you want the money for. Since you?ll be talking to folks who will potentially loan you money, and they?ll be asking you questions, doesn?t it make sense to think through the answers to those questions ahead of time. Put your thoughts down on paper, and develop a written investing business plan.

Answer the questions lenders are most likely to ask? things like the type of property you invest in, how much money you?re likely to need, how much of your own money you?ll be using, how long you?ll need the money for, how you plan to pay it back, what rate of return can they count on, and so on. All of these things and more will be on your potential private lender?s mind. When you?re planning your approach for private money for real estate investing, you need to give these areas some thought.

One of the keys to finding private money for real estate investing is self-promotion. Don?t be shy about getting the word out that you?re looking for private money for real estate investing. Use all the same promotion tools you would use for other purposes. Classified ads, billboards, bandit signs, radio, TV, and promotional items like pens, hats, and magnets all make good ways of reaching your target audience. Let?s face it? you never know who?s got the money to lend, so you?ve got to get the message out to as many folks as possible.

Another key to finding all the private money for real estate investing you?ll ever need is planning and preparing a professional presentation. Put yourself in the place of a potential lender. What would you like to know in order to be comfortable loaning you money? How can you present your business plan in a professional yet persuasive way? What tools will impress and communicate effectively? Use everything at your disposal to put yourself and your investing business in the best possible light.

Presentation binders, handouts, flyers, and PowerPoint are all tools that have been used quite successfully by others looking for private money for real estate investing. Testimonials are especially powerful and effective. If someone has loaned you private money for real estate investing before, and you paid it back as agreed, ask them for a written testimony about the experience. Put their testimony into your presentation materials.

In fact, whenever you sign up a new private lender, ask them for a testimony about their experience. Finding private money for real estate investing doesn?t have to be a struggle. Use all or some of the tools in this article, and from a more in-depth article I?ve written called Private Money For Real Estate Investing. Then you?ll stand head-and-shoulders above the other investors in your area who?ll wish they had access to all the private money you do!

Now, go make more offers!

Private Money Real Estate Investing - One Clause You Should Never Forget

When you use private money for real estate investing there are several clauses your lending agreements should never be without. One of those clauses is the ?Substitution of Collateral? clause. Here?s how it works.

Wouldn?t it be great to be able to just swap one property for another on your mortgages? Of course it would, and when you use private money for real estate investing, you can? just by including one little clause in your private lender?s notes.

Here?s how the clause would read.

“Borrower reserves the right to substitute like collateral of equal or greater value” Did you see what just happened? By inserting one tiny little phrase in your private notes, you?ve created a scenario where you don?t have to pay off your loan and get a new one every time you sell and buy property. The flexibility and power this one little clause will give you is outstanding. Suppose you own a duplex that you used private money for real estate investing to obtain, but now you have the opportunity to sell at a large profit. Instead of worrying about the hassle of paying off the note and getting a new loan for your next property, why not just go out and find an equal or greater value property to invest that money in.

Once you finalize the transaction, it?s important that you file your lender?s security against the property with the appropriate government agency, normally your county clerk. Your lender will most likely insist on having a mortgage or deed of trust on file to protect their interest.

The flexibility and leverage this clause gives you is yet another great reason why using private money for your real estate investments is a wise idea.

Your investor will be happy to keep his money working, and you will too. It?s a win-win for both of you, and it?s possible because you thought to include a ?Substitution of Collateral? clause in your private money for real estate investing note. For more information visit http://www.private-money-real-estate-investing.com

Smart? very smart.

Real Estate Investing - Building Your Team

The story goes that legendary football coach Vince Lombardi once opened a team meeting by saying, "OK men, we’re going all the way back to the fundamentals." Holding up a football he began the day’s lesson, "This is a football."

After a brief pause, one of the players raised his hand. "Coach… you’re moving a little fast for me."

Whether this tale is true or not, it does illustrate an important point. Even the best need to begin with fundamentals, and nothing is more fundamental to your Real Estate Investing business than building a team of competent professionals you can rely on. With that in mind, let’s outline the steps necessary to put together a quality team.

Take A Personal Inventory

First, you need to decide what skills you possess, or more importantly, what skills you don’t possess. For instance, if you are a licensed Realtor or a CPA, you probably don’t need to find a Realtor or accountant to work with you. Likewise, an experienced General Contractor won’t need to find another GC for his or her team.

Begin by taking inventory of what you are good at, what you can handle in a pinch, and what you know you just can’t or don’t want to do. Write your list down. Now, think about the types of people available to help you with the areas you are weak in. Here’s a list of the various types of professionals I have used over the years.

Realtor, attorney, bookkeeper, accountant, general contractor, specialized sub-contractor (roofer, plumber, electrician, heating and cooling, landscaper, etc.), handyman, engineer or home inspector, banker, mortgage broker or lender, private lender, hard-money lender, bird-dog, wholesaler, insurance agent, and commercial real estate broker.

While this is not meant to be an exhaustive list, and there may be others you need to rely on from time to time, this list should give you a pretty good idea of what types of professionals you need to be searching for. Chances are, you’re not good at all of these things, so it’s safe to say you will need to look for at least a few of these people.

Rely On The Experiences Of Others

Building a team is not something you will do all at once in a week or two. It will take time and perseverance, but it is not as difficult as it may appear. You can accomplish a great deal by asking for referrals from people you already know and trust.

Ask everyone you know about the people they do business with, and keep a written notebook of the referrals you get. I call these "warm contacts", and they are so much more useful than getting names from business cards or advertisements. Pay special attention to the names you get from other real estate investors. If your city has a Real Estate Investor’s Club, and you’re not already a member, join today! This will be a rich source of contacts, as well as local market information. You can’t afford not to be a member.

Once you have the name of a professional, an accountant for instance, you will want to meet and interview that person. Call them to schedule an appointment, and mention the name of the person who referred you. You may even want to invite them to lunch. Wherever you meet, it’s important to have a plan and know what you want to ask them ahead of time. Get to know them, and give them plenty of opportunity to talk about themselves and their method of doing business.

By all means don’t grill them or give them the third degree. You’ll find out all you need to know by simply having a conversation with them, and creatively weaving your important questions into the natural flow of the discussion. Write down the answers you find interesting, and refer back to them later when you’re deciding whether or not to hire the person. Remember to thank them for their time.

You Are The Judge And Jury

What criteria are you looking for? That depends on a few factors.

First, do you like the person? Life’s too short, and there are just too many other options, to waste time with someone you don’t want to be around.

Second, are they professional? Do they approach their business, and yours, with a serious attitude? Will they safeguard your time and money almost as if it were their own? Do you get the sense they are serious about their profession? Do they treat their business like a business and not a hobby. Incidentally, do you?

Finally, do they possess the experience, skill, and know-how you are looking for? The person who referred them to you can help answer that, but be sure to ask for additional referrals, and contact the referrals they give you. Ask plenty of questions and make sure they are fully capable of fulfilling your expectations.

Hire Them Right, And Enjoy The Journey

When you hire anybody, be it General Contractor or home inspector, make certain that you clearly define the scope of the relationship from the beginning, preferably in writing. Never enter into a business agreement involving the exchange of value (money or time) without a clear written agreement. This will save you all kinds of pain and aggravation later. The question isn’t whether someone will let you down, but when.<BR><BR>Just because you decide to put someone on your team today, doesn’t mean they will stay there forever. My team has evolved over time, and yours will too. As you work with people, you will notice things about them you didn’t see during the search process. Their methods may change over time, and your needs will change also. Don’t be afraid to end a partnership- after all, it’s a business relationship, not a marriage. Just be sure to honor all of your commitments.

Finally, enjoy the search process, and keep your eyes and ears open all the time. This can be the most exciting period in your investing life, and you never know when you are going to meet someone who would make a good fit on your team. I have found some of my most trusted advisors and professionals when I wasn’t looking, and when I least expected to find them. Many of them have subsequently become good friends.<BR><BR>Now, go make more offers!

How To Get Private Money For Real Estate Investing - Step Three

OK, you have taken the first two steps in the process of getting private money for real estate investing. First, you developed a Business Plan to give to your prospective lenders. Next, you created a Lender Fact Sheet, outlining exactly what you are looking for from a private lender. Time for Step Three.

The major question on your lender?s mind is, ?What?s in it for me?? Everybody asks that question when they consider parting with their hard earned money, and your prospective lenders are no exception. You have answered that question by giving them your Business Plan and Lender Fact sheet, showing them the rate of return they can expect. They have only one major question left.

How is my interest protected?

You see, people are motivated to do things, or NOT do them, for all sorts of emotional reasons. Fear is one of the most powerful. To be successful getting people to loan you private money for real estate investing, you must help them to see that they have nothing to fear by lending you the money. You must allay their fears and doubts.

This is accomplished by using a Security Agreement, both in your Lender Information packet (alongside your Business Plan and Lender Fact Sheet) and attached to every one of your private notes as they are created for each deal.

Your Security Agreement tells your prospective lender that their money is secured by the value of the real estate you are buying. In other words, they will have a lien against the title of the property filed with the proper government authorities. You will personally file the security documents in each and every private lending transaction, and you will provide certified copies to your lender. Their investment will always be backed by the real estate.

Since you have already demonstrated to them, through your Business Plan, that you have a track record of ALWAYS buying value, and NEVER overpaying for property, your prospect will be able to clearly see that their interest is protected, and they have nothing to fear.

Step three in getting all the private money for real estate investing you will ever need? Develop a Security Agreement.

For much more =>five steps to private money for real estate investing

Real Estate Investing - Building Your Team

The story goes that legendary football coach Vince Lombardi once opened a team meeting by saying, "OK men, we’re going all the way back to the fundamentals." Holding up a football he began the day’s lesson, "This is a football."

After a brief pause, one of the players raised his hand. "Coach… you’re moving a little fast for me."

Whether this tale is true or not, it does illustrate an important point. Even the best need to begin with fundamentals, and nothing is more fundamental to your Real Estate Investing business than building a team of competent professionals you can rely on. With that in mind, let’s outline the steps necessary to put together a quality team.

Take A Personal Inventory

First, you need to decide what skills you possess, or more importantly, what skills you don’t possess. For instance, if you are a licensed Realtor or a CPA, you probably don’t need to find a Realtor or accountant to work with you. Likewise, an experienced General Contractor won’t need to find another GC for his or her team.

Begin by taking inventory of what you are good at, what you can handle in a pinch, and what you know you just can’t or don’t want to do. Write your list down. Now, think about the types of people available to help you with the areas you are weak in. Here’s a list of the various types of professionals I have used over the years.

Realtor, attorney, bookkeeper, accountant, general contractor, specialized sub-contractor (roofer, plumber, electrician, heating and cooling, landscaper, etc.), handyman, engineer or home inspector, banker, mortgage broker or lender, private lender, hard-money lender, bird-dog, wholesaler, insurance agent, and commercial real estate broker.

While this is not meant to be an exhaustive list, and there may be others you need to rely on from time to time, this list should give you a pretty good idea of what types of professionals you need to be searching for. Chances are, you’re not good at all of these things, so it’s safe to say you will need to look for at least a few of these people.

Rely On The Experiences Of Others

Building a team is not something you will do all at once in a week or two. It will take time and perseverance, but it is not as difficult as it may appear. You can accomplish a great deal by asking for referrals from people you already know and trust.

Ask everyone you know about the people they do business with, and keep a written notebook of the referrals you get. I call these "warm contacts", and they are so much more useful than getting names from business cards or advertisements. Pay special attention to the names you get from other real estate investors. If your city has a Real Estate Investor’s Club, and you’re not already a member, join today! This will be a rich source of contacts, as well as local market information. You can’t afford not to be a member.

Once you have the name of a professional, an accountant for instance, you will want to meet and interview that person. Call them to schedule an appointment, and mention the name of the person who referred you. You may even want to invite them to lunch. Wherever you meet, it’s important to have a plan and know what you want to ask them ahead of time. Get to know them, and give them plenty of opportunity to talk about themselves and their method of doing business.

By all means don’t grill them or give them the third degree. You’ll find out all you need to know by simply having a conversation with them, and creatively weaving your important questions into the natural flow of the discussion. Write down the answers you find interesting, and refer back to them later when you’re deciding whether or not to hire the person. Remember to thank them for their time.

You Are The Judge And Jury

What criteria are you looking for? That depends on a few factors.

First, do you like the person? Life’s too short, and there are just too many other options, to waste time with someone you don’t want to be around.

Second, are they professional? Do they approach their business, and yours, with a serious attitude? Will they safeguard your time and money almost as if it were their own? Do you get the sense they are serious about their profession? Do they treat their business like a business and not a hobby. Incidentally, do you?

Finally, do they possess the experience, skill, and know-how you are looking for? The person who referred them to you can help answer that, but be sure to ask for additional referrals, and contact the referrals they give you. Ask plenty of questions and make sure they are fully capable of fulfilling your expectations.

Hire Them Right, And Enjoy The Journey

When you hire anybody, be it General Contractor or home inspector, make certain that you clearly define the scope of the relationship from the beginning, preferably in writing. Never enter into a business agreement involving the exchange of value (money or time) without a clear written agreement. This will save you all kinds of pain and aggravation later. The question isn’t whether someone will let you down, but when.<BR><BR>Just because you decide to put someone on your team today, doesn’t mean they will stay there forever. My team has evolved over time, and yours will too. As you work with people, you will notice things about them you didn’t see during the search process. Their methods may change over time, and your needs will change also. Don’t be afraid to end a partnership- after all, it’s a business relationship, not a marriage. Just be sure to honor all of your commitments.

Finally, enjoy the search process, and keep your eyes and ears open all the time. This can be the most exciting period in your investing life, and you never know when you are going to meet someone who would make a good fit on your team. I have found some of my most trusted advisors and professionals when I wasn’t looking, and when I least expected to find them. Many of them have subsequently become good friends.<BR><BR>Now, go make more offers!

Real Estate Investing - Building Your Team

The story goes that legendary football coach Vince Lombardi once opened a team meeting by saying, "OK men, we’re going all the way back to the fundamentals." Holding up a football he began the day’s lesson, "This is a football."

After a brief pause, one of the players raised his hand. "Coach… you’re moving a little fast for me."

Whether this tale is true or not, it does illustrate an important point. Even the best need to begin with fundamentals, and nothing is more fundamental to your Real Estate Investing business than building a team of competent professionals you can rely on. With that in mind, let’s outline the steps necessary to put together a quality team.

Take A Personal Inventory

First, you need to decide what skills you possess, or more importantly, what skills you don’t possess. For instance, if you are a licensed Realtor or a CPA, you probably don’t need to find a Realtor or accountant to work with you. Likewise, an experienced General Contractor won’t need to find another GC for his or her team.

Begin by taking inventory of what you are good at, what you can handle in a pinch, and what you know you just can’t or don’t want to do. Write your list down. Now, think about the types of people available to help you with the areas you are weak in. Here’s a list of the various types of professionals I have used over the years.

Realtor, attorney, bookkeeper, accountant, general contractor, specialized sub-contractor (roofer, plumber, electrician, heating and cooling, landscaper, etc.), handyman, engineer or home inspector, banker, mortgage broker or lender, private lender, hard-money lender, bird-dog, wholesaler, insurance agent, and commercial real estate broker.

While this is not meant to be an exhaustive list, and there may be others you need to rely on from time to time, this list should give you a pretty good idea of what types of professionals you need to be searching for. Chances are, you’re not good at all of these things, so it’s safe to say you will need to look for at least a few of these people.

Rely On The Experiences Of Others

Building a team is not something you will do all at once in a week or two. It will take time and perseverance, but it is not as difficult as it may appear. You can accomplish a great deal by asking for referrals from people you already know and trust.

Ask everyone you know about the people they do business with, and keep a written notebook of the referrals you get. I call these "warm contacts", and they are so much more useful than getting names from business cards or advertisements. Pay special attention to the names you get from other real estate investors. If your city has a Real Estate Investor’s Club, and you’re not already a member, join today! This will be a rich source of contacts, as well as local market information. You can’t afford not to be a member.

Once you have the name of a professional, an accountant for instance, you will want to meet and interview that person. Call them to schedule an appointment, and mention the name of the person who referred you. You may even want to invite them to lunch. Wherever you meet, it’s important to have a plan and know what you want to ask them ahead of time. Get to know them, and give them plenty of opportunity to talk about themselves and their method of doing business.

By all means don’t grill them or give them the third degree. You’ll find out all you need to know by simply having a conversation with them, and creatively weaving your important questions into the natural flow of the discussion. Write down the answers you find interesting, and refer back to them later when you’re deciding whether or not to hire the person. Remember to thank them for their time.

You Are The Judge And Jury

What criteria are you looking for? That depends on a few factors.

First, do you like the person? Life’s too short, and there are just too many other options, to waste time with someone you don’t want to be around.

Second, are they professional? Do they approach their business, and yours, with a serious attitude? Will they safeguard your time and money almost as if it were their own? Do you get the sense they are serious about their profession? Do they treat their business like a business and not a hobby. Incidentally, do you?

Finally, do they possess the experience, skill, and know-how you are looking for? The person who referred them to you can help answer that, but be sure to ask for additional referrals, and contact the referrals they give you. Ask plenty of questions and make sure they are fully capable of fulfilling your expectations.

Hire Them Right, And Enjoy The Journey

When you hire anybody, be it General Contractor or home inspector, make certain that you clearly define the scope of the relationship from the beginning, preferably in writing. Never enter into a business agreement involving the exchange of value (money or time) without a clear written agreement. This will save you all kinds of pain and aggravation later. The question isn’t whether someone will let you down, but when.<BR><BR>Just because you decide to put someone on your team today, doesn’t mean they will stay there forever. My team has evolved over time, and yours will too. As you work with people, you will notice things about them you didn’t see during the search process. Their methods may change over time, and your needs will change also. Don’t be afraid to end a partnership- after all, it’s a business relationship, not a marriage. Just be sure to honor all of your commitments.

Finally, enjoy the search process, and keep your eyes and ears open all the time. This can be the most exciting period in your investing life, and you never know when you are going to meet someone who would make a good fit on your team. I have found some of my most trusted advisors and professionals when I wasn’t looking, and when I least expected to find them. Many of them have subsequently become good friends.<BR><BR>Now, go make more offers!