7 Strategies To Convince a Private Money Lender To Fund Your Real Estate Deal

Posted on: October 12, 2011

Categories: Buy, Other Articles

Author: lbuen

So you have set up your real estate website and blog to establish your online presence and start building on your name as an authority in the industry to build credibility not just for buyers and sellers of properties, but investors, as well. You have kicked off your word-of-mouth marketing by tapping your network to make known to everyone you know that you are into real estate investing. And so you have gotten a few messages hinting interest in investing in your deals. Your concern now is how to clinch the deal with a private money lender? Here are some tips.

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Private Money Lender Image by Images_of_Money via Flickr

1. Arrange a face-to-face meeting with your prospective private money lender.

Online interaction is not enough. You must totally convince your prospect that you are indeed human. Time to surface from your online persona and engage with your potential private money lender in person. This is the best way to let a complete stranger get to know, like and trust you. If this is not possible though, for geographical or other reasons, technology can help; you can set up a live webinar or online video chat.

2. Deliver an impressive and convincing presentation.

Presenting the real estate investing deal to your potential private money lender is crucial as it can make or break the deal between the two of you. So prepare for this meeting. Invest time in devising your presentation and mastering how to present it with confidence and conviction. A timid proposal will not win over any investor, but a show of confidence and passion can make the deal.

3. Listen to the private money lender to be able to detect and directly address his resistance and confusion.

Brace yourself for possible resistance and questions that he may ask and prepare and practice your answers or your ways on how to deal with a particular resistance.

4. Exercise and build your negotiation muscle.

Develop the skill of reading the person on the other side of the negotiation table. Master the ability to mirror him and use the same language game he is using. Learn to identify the perfect timing to go for the close and know how to execute this.

5. Back your words with numbers.

It is not enough to say that the opportunity is profitable. Tell the potential investor how much ROI he will be getting, when he will be getting back his money and his ROI, and other pertinent figures.

6. Present a safety net for the private money lender.

Investors do not just think about profits. They also weigh the risks involved. The more safe you can make them feel, the more likely they will put their money on your deal. So be straightforward about the possible risks and offset this with safety nets you have arranged for them.

7. Act as if you do not need them, but that they need you.

Do not give your potential private money lender the hard sell, otherwise he may sense your desperation, or think that you are not doing good at the moment. Make your presentation as easygoing as possible, without begging for the close. Make him feel that it is as much an opportunity for him as it is for you, and that if he will not transact, the opportunity can go to other investors.

As a final word, it is crucial that you yourself are convinced that your real estate investing deal is indeed promising, otherwise it would be doubly hard for you to convince your prospective private money lender.

 7 Strategies To Convince a Private Money Lender To Fund Your Real Estate Deal
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