How To Get Past The #1 Private Money Roa...

stop Hey Moguls, Patrick Riddle here with a powerful lesson about working with your private money lender.

What’s that you say? You have no private money lender because you can’t get over that first roadblock? Well, never fear – after you get this information, you’re gonna sail right over that so-called roadblock.

You probably already know where I’m going with this...

You want to seek out private money lenders, but you’re such a greenhorn newbie, they might run in the other direction. (At least that’s your current perspective of the situation.)

So, potential private money lenders simply do not see you as a credible risk. They aren’t sure you’re good for your promises. (Can you blame them? They’ve learned to be wary through experience.)

In my years of working with investors all over the country, I can honestly say this is probably the biggest reason why investors have a battle with getting private money funding.

Let’s say you’re face to face with your potential lender and you’ve already braced yourself for the dreaded, inevitable question:

“So, how many deals have you closed?”

And you want to hide under the table. But think about it, they have a right to ask that question. And they have a right to an honest answer.

If at the moment your score of completed deals is zero, what's next?

Here are a couple of strategies that you can use that will give you confidence and also build creditability in their eyes – even if you’re that greenhorn newbie.

Strategy 1 – Association

I’m sure you’ve heard the saying that you’re judged by the company you keep. This means that people tend to judge you based on who you are associated with. (Or even who they perceive you to be associated with.)

Let this be the ace-up-your-sleeve for presenting yourself to a potential lender. You simply borrow the credibility of the power team that you’ve put together.

Your team may include:

Agents
Brokers
Lawyers
Title Companies
Appraisers
Contractors
And others…

These men and women play an integral part in your business - these truly are your colleagues. You might want to make a list of your team members and, just for your own benefit, write out beside each one how many years they’ve been in business. It may surprise you.

roadblock You’ll then use this information during your presentation to your prospective lender. Mention the expertise, experience and success of your team members. And always refer to them as “my team.”

You might be able to say that your closing attorney has been in business for 20 years and has closed thousands of transactions.

This is not the time to use any personal pronouns – leave out references of “me” and “I.” Instead you’ll be talking about your team – it’s “us,” and “we.”

As you continue talking about your team, suddenly you’ll gain more credibility in the perception of this prospective lender.

It goes without saying that your team of credible professionals must be in place, so make sure you’re selecting people you can be justifiably proud of. People who you want to be associated with.

Strategy 2 – Aikido

At first this may sound strange, but the second strategy is to use the principles of the Japanese form of martial arts called Aikido. The principles of Aikido says that instead of going against an opponent’s force, you move with it.

We know it as, “go with the flow.”

Let’s say you’ve been laying out information about your team members, but the potential lender still insists that you answer the original question: “How many deals have you closed?”

You need not lie, but realize what that person is truly looking for. They’re looking for assurance that their money will be safe and secure in any deal of yours that they choose to fund.

Knowing that, you simply answer honestly, but then redirect the subject. You might say something like this:

“I’ve not yet closed a deal. I’ve been knee-deep in laying groundwork to build my business and assemble my team. (You’re smiling as you say this.) But it’s important for you to be aware that your security is in the transaction of the property. And in the end, you’ll have a full, in-depth review with photos and all the numbers in place. It’s with this information that you can then give your final approval before moving forward with funding. You’ll be funding only the deals that make complete sense to you based on your due diligence. And this is what makes it a safe investment for you. Does that make sense?”

See what just happened? This tactic is to flow with the negative force and redirect the momentum away from your experience (or lack thereof) and toward the investment property.

This will be the safety net you’re offering to this potential lender. It will help to instill in him that needed sense of security.

Go for it!

With these two strategies in your tool belt, you will be equipped to meet a potential private money lender with all the confidence required to acquire the funds you need. Just go for it!

Whatcha Think?

How did you get over this roadblock? Share in the comments section below.

Be aware that you are not begging for money or a loan. You are rendering a much-needed service – that of helping this lender grow his money.

Build a good strong team so you can use the strategy of association – you can present their expertise rather than your own.

Go with the flow by redirecting the question of your experience over to the credibility of your team and the deal at hand, which after all, is their real security.