Archive for Private Lending Reports

Question: “- – – I don’t see being able to pay them monthly, and I am not sure I want to share in the equity – – – what is your take on it?”

Investors can be your most valuable asset, and the cost of what you pay them is always worth it.  So if you can't make monthly payments out of the cash flow from your project then you have 2 choices:

1) Reward investors with equity–a percent of your profit.  If the investor puts up all the money, giving them a minimum of 50% of the profit is pretty standard, and you may want to give them even more to get them on board for your first deal.

2) Offer deferred interest – that is, all the interest due and the principal owed will be paid when you exit from the deal (usually by selling the property).

raise private equity capital
Many new or beginning real estate entrepreneurs despair about raising money from private investments to fund their deals, because they have not yet done a deal themselves.

Therefore, they think, “Who would want to invest with me”.  It feels like “Catch-22”.

Now, experience is important.  However, it doesn’t have to be your real estate experience.  In order to understand this, you have to start out with a change in mindset.

Let me ask you a question.

When you invest in the stock market, do you invest in a company like IBM or do you invest in the CEO of IBM?  Heck, do you even know who the CEO of IBM is?  Probably not.  You see, private investors feel much more comfortable investing in a “Company” rather than an individual.

So, besides all the other advantages of forming a legally recognized entity like an LLC (Limited Liability Company) or a Corporation, you acquire the credibility of being a “Company”.  By the way, the dba (doing business as) structure is not a legally recognized entity and brands you as an amateur.

Now, once you are a “Company”, you can appoint officers, you can appoint members of a Board of Directors, or you can appoint a Board of Advisers.  Therefore, if you lack real estate experience, appoint individuals who have great experience in this area; and if you lack business experience, appoint individuals who run successful companies and have years of experience.

In other words, as a legal entity, you can appoint, hire and associate with individuals whose credibility will boost your own.

Now some of you may have people that come to mind immediately for you ask to be on your Board of Advisers.  In fact, you should begin to make a list of those individuals who have the various expertise that you need and who you know would be willing to participate at this level AND have your success in mind.

And here’s a Bonus.  While my time and how I invest it is very very important to me, for those of you who choose to attend our Advanced Private Lending Summit, you can appoint me to be a member of your Board.  (Please don’t ask this of me if you do not attend, since I can only lend my reputation to people I know and work with.)

To find out more about this one-of-a-kind workshop, Click here for more details about how you can attend the event AND receive a huge member discount.

private money bad credit I just got this email: Will bad credit hinder me from getting a private investor?
Sincerely,
Tammy

Well, Tammy the answer is: Your credit has absolutely nothing to do with raising money from a private investor.

There are 2 reasons:

1) The private investors cares about the 5 key secrets:
-What’s in it for him (or her)? – that is the return on investment
-Return OF Investment – the soundness of your exit strategy
-Risk – how well have you structured the investment to minimize the financial risk to the investor
-Credibility – Are you a company? Does your company have experience, advisors and professionals that can make sound decisions.
-Trust – do you have a relationship with the investor. Have you built up his trust that you can do what you say?

2) The second reason is that the investment should not be about YOU. It’s about your company. After all, if you invest by buying shares of IBM or General Electric, do you know the credit score of the CEO? Heck, do you even know who the CEO is? Does it matter? No, because you’re investing a company with a track record and resources to carry out it’s mission and achieve its goals.

You should present your investment the same way. Listen to some of the interviews with private lenders, and our articles on structuring the financing for your business and creating an impressive business plan.

When you’d like to go to the next level, you may want to consider attending our Advanced Private Lending Summit where we work with you 1 on 1 to create your entire private lending program including your own personalized presentation to private lenders.

EVERYONE who has attended has loved it, and are now busy raising money from private individuals. We hold our Summit 2 times a year here in Atlanta.

Check your Members’ Area for the schedule AND get a Members Discount on the Tuition.

Here’s a comment from just one of our last attendees:

“..Save your money as quickly as possible [so you can go to this].

I was at that seminar and now will be giving my presentation to a few MDs this week.

Having the ability to practice it in front of the group and hear Richard’s insightful critique sure did help. More to follow, after the presentation.”


– Vivian Hooton vivianhooton@gmail.com