Attracting Private Money Lenders For Real Estate : A Marketing Pursuit

Posted on: October 31, 2011

Categories: Other Articles

Author: lbuen

Private Money Lenders for Real Estate – No Ordinary Lenders

So you think obtaining financing from private money lenders for real estate is a financing process? Think again! For savvy real estate entrepreneurs, they know that it is a marketing undertaking. Why? Let’s first take a glimpse at the financing process of applying for traditional loans.

Applying for Funding From Traditional Lenders

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Private Money Lenders Image via Wikipedia

In the typical financing process, you need to submit an application at a bank or lending institution and submit a mountain of paperwork to support your application. Your credit score, financial state, and other qualifications have to pass the loan committee’s stringent standards. In effect, you are asking the bank a favor to lend you money by seeking their approval, and in return you pay them interest for the loan. You are at the banker’s mercy.But this is not so with obtaining funding from private money lenders for real estate.

Selling the Investment Opportunity to Private Money Lenders for Real Estate

When raising private money, forget about piling up paperwork, meeting the loan committee’s rigid criteria and waiting for the relatively long application process. Instead, your primary concern is to found an investment opportunity and bang the drum for this earning opportunity to the right individuals. Yes, you will do some selling with a promising real estate deal as your product. Remember that when you are marketing a product, it must satisfy a need, and in this case, you satisfy their need for a lucrative investment vehicle or an earning opportunity.

So how do you market this investment opportunity you have established? The most common, and proven effective, method of doing this is by “word of mouth” marketing. Yes, you talk about it and eventually, you get other people to talk about the opportunity you are selling. To effectively do this, you must first establish yourself as a competent real estate investor, that way you can win the trust and money of prospective private money lenders for real estate. Nowadays, real estate investors make use of the Internet to do this and set up a website and/or a blog to have a more extensive reach. This could take some time to ripen, so in the meantime, you can do your offline marketing. You can start by letting your family, relatives, friends, neighbors, and all people you know and meet know that you are in this business. You encourage them to tell others about it especially if they know people interested to invest or would want to buy or sell a home. Then expand your center of influence by joining networking groups, and other relevant associations so that you get to meet prospective private money lenders for real estate or people who can introduce you to such financiers. Go, make yourself a business card as a real estate investor which you give to everyone you meet. Initially, they may not be interested or may not have available funds yet, but with your contact number, email and website on your card, they can just contact you when they become interested. Your calling card will serve as your “flyer” advertising your “product”.

Another way of harnessing “word of mouth” marketing is by establishing a referral marketing system. This is especially handy once you have a queue of real estate deals in your pipeline. You can join a referral marketing association in your area. Be prepared to cultivate a sort of give-and-take business relationship; you bridge the people you network with to people you know who can bring in more business or opportunities for them, and they will also do the same for you. But initially, just focus on understanding their business so that you can send relevant referrals, and doing them favors to establish that relationship, and you will eventually find good referral partners you can work with for the long haul.

Marketing your investment opportunities may initially take some time and hard work, but once you already have a roster of private money lenders for real estate as a result of your “marketing” and networking efforts, you can have private money at your fingertips every time you need it.

 Attracting Private Money Lenders For Real Estate : A Marketing Pursuit
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