Raise Money for Your Real Estate Deals: 4 Different Ways!

Given the lending climate’s current reluctance for entertaining lending requests from real estate investors, a new approach is necessary in order for real estate investors to conduct business. Freddie Mac and Fannie Mae have indefinitely terminated investor loans. Traditional banks, big and small, will likely not touch investor loans for years to come; And it’s not unheard of these days for hard money lenders to charge an excess of 25% in total fees to borrow their money. So, how does a real estate investor these days raise money?how to invest

My partner and I have found a great way to raise money for our real estate transactions. We work with private sources, specifically people dissatisfied with the current return on their investments. In the business, they call this “private money.” There are four ways in which we do this and I’ve laid them out for you below.

Private Group Presentations

This can be the most effective strategy to raise money if done correctly. A private presentation involves putting anywhere from 5 to 15 people into a room (we like to provide a small dinner and/or appetizers, but not required) and presenting the details and benefits of two or three deals we currently have in the pipeline. Depending on one’s comfort level in front of a room, a group presentation isn’t for everyone. Having said that, there is a huge advantage to presenting to a group. When questions from the group arise it’s almost as if a “mastermind” effect takes place and instills confidence and creates possibilities that leave the group excited.

One-on-One Meetings

An alternative to group meetings are one-on-one meetings. Generally, we conduct our one-on-one meetings during breakfast at a quiet restaurant. Twenty to thirty minutes is typically sufficient to present the details and benefits of our opportunities.

Private and Group Webinars

With the advancement of technology, online presentations via a webinar have proven extremely effective for us to raise money. Rather than physically coming to a one-on-one breakfast meeting, a potential private money lender can watch our presentation from the comfort of their own home or office and still ask questions. Additionally, if a group attends one of our webinars it seems we get the same “group” effect of creating excitement.

Current Private Lenders

The most overlooked source of lending when it comes time to raise money is one’s current private money lenders. Ask your current lenders for more participation in your deals, and don’t forget to ask for referrals either. Many investors will contribute a small amount of their money to a project and wait for results before investing more. Maintain integrity within your deals and follow through. By doing this, money often times will find you.

There are three “money raising” questions we use to identify solid private money lenders. We’ve compiled them for you in a short e-Book. For more information on how to find private money lenders using our proven three money raising questions, visit 3MRQ.

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