24 Apr Private Lender Conversation Tips
Wow, sorry for the delay since my last post, but the market has been really good to us lately, so that’s where I’ve been focusing most of my time and attention.
As entrepreneurs, we have to take advantage when the opportunity arises for sure. I’ve been consistently closing 3-5 deals a month now and using 100% private money. Many of our clients are doing the same as well.
So, as a result, I’ve been talking to alot of lenders lately to line up financing for our deals we have under contract, and building future lending and partnership relationships. Anyways, I ran across an old blog post.
I wrote a while back and it reminded me about how important your conversations are with private lenders.
Check this out and keep some of these tips in mind when you’re speaking to your prospective lenders:
3-tips about Private Lender Discussions As real estate investors, we all know that having access to financing for our deals is critical to the profitability of our business. And in this economy, developing private lender partnerships can, for some, be the difference between success and failure. Yet, when it comes down to ‘asking’ for the money, this is one of the biggest fears that we face. Of course it is! Who wants to ask someone for money? I certainly don’t, and really never have. You see, that’s part of the problem, which is the programming that goes through our minds.
1st Tip: Don’t Ask For Money If you go around asking people for money, you’re likely to get zero. Nobody likes a salesman, especially a bad one at that. You must focus on what your lenders want. They want what we all want: A solution to a problem. And I can tell you the main problem most people with available investment funds face these days is finding good, trustworthy people to invest with and still earn a decent rate of return. So instead of focusing on the money, I encourage my students to focus on listening to their lenders goals, fears and overall objectives before discussing any investment opportunity. Don’t focus on your deal or perfecting the ‘perfect close’ to hook them in. To borrow from Stephen Covey, ‘Seek first to understand, then be understood’. Once you develop the relationship and learn what your private lenders are looking to accomplish with their investment, you can then begin to structure ‘win-win’ deals and mutually beneficial arrangements.
2nd Tip: Focus on Developing Win-Win relationships I’ve found that when you put together ‘Win-Win’ opportunities, the referrals from friends will start to coming soon thereafter… I’ve literally had to tell lenders to ‘wait in line’ because I just don’t have a deal for them right now…Believe me, this is a great problem to have and, as we know, a lack of supply will only increase the demand
3rd Tip: If it’s not Win-Win, Walk Away Another benefit of taking this approach is on occasion you will discover that its just not a good fit for you and that particular investor, for whatever reason, but its much better to discover this out BEFORE doing a deal…Trust me on this. Don’t force it, there will always be another opportunity that will work out better if you have patience mixed with persistence. Thanks for reading, and if you’re interested in seeing how my Private Money System can work for your business, check out this: