5 Steps to Private Money

From info provided by Alan Cowgill. Be sure to join us May 16th at MAREI at Alan's Virtual Private Money Training to take a look at all 5 steps in depth. Details at www.MAREI.org

The great thing about private money is that once you have gone through the 5 steps, you have improved your ability to do it again.

1. Build Credibility

2. Generate Lender Leads

3. Secure the Lenders

4. Buy / Sell Property

5. Get Paid

With each time you sell or refinance a property and pay off your private lender, you build more credibility and you open the door to more leads and new lenders. Not to mention that once you pay a lender their interest, the'll lend you more money and maybe tell a friend.

Build Credibility

One of the very first concerns of a potential lender is can they trust you. If they don't they are not going to hand over their money. And while your personality and building a relationship can ease minds, having good documentation to prove you know what you are doing can go a long way. So take the time to develop a credibility kit in several different forms that contains your bio, your team members, what you do, certificates and awards, testimonials, before and after photos, case studies of deals, testimonials, memberships and associations (Like MAREI), and good press that may have been written about your company.

Generate Leads

There are several ways to generate new leads for potential lenders. By far the easiest is talking to people you meet in every day life beyond that you need to seek out people you don't know through advertising, direct mail, or events like home shows.

Be sure with each lead generation you do have a plan and a strategy. Know what you can and can't do within the law, have your pitch and presentation ready, and practice what you are going to say.

Secure the Lenders

Once you have someone who wants to learn more, schedule a time for a meeting either online or in person, possibly one on one or maybe even in a group setting.

At this meeting you basically give thema small training class on just whatprivate money is, how it works, and whyyou might be a good risk. Be sure tohave your credibility kit and some sortof leave behind package that includessample forms and documents, casestudies, charts and graphs, informationabout Self Directed IRAs and otherretirement accounts.

At the meeting share your pitch, your presentation, ask for the money and for referrals and have a scheduled followup. If you have a deal right now, set up a time to go over that exact deal. Or if you don't have one right now, set up a way to get that deal in front of them when you do have it.

Buy or Sell the House

This is going to take having an actualdeal to have funded. Be sure you closethrough your local title company, havethe right promissory note, deed of trustor mortgage. Make sure you have alender's title policy to protect theirinterest and that you name your lenderas second insured on the hazardinsurance policy. And to best protecttheir interest make sure you have anappraisal showing the after repairedvalue of the home and a detailed scopeof repairs. And by all means make sureall closing takes place at a title orescrow company and that all moneyfrom the lender is wired to the titlecompany and disbursed to pay for the property or to you for rehab only afterall documents are properly signed andrecorded.

Pay Day

Next you complete your renovation soyou can then sell the property and getpaid or rent it out, refinance in into apermanent loan if your lender is notlending long term. Make sure yourlender gets taken care of, eitherthrough monthly principle and interestpayments and their final payoff whenthe property is sold or refinanced.Remember the lender gets paid beforeyou do.

Once the deal is complete, add it toyour credibility kit and lender packets.Go do it all again.