(NOTE: What it's like to write a $1,000,000 check for a sweet piece of undervalued real estate … even if your bank account is overdrawn and you owe the local lawn boy $20? This special report shows you step-by-step.)
Valentine’s Day was over one month ago, and many folks have never looked back. After all, they reserved their tables at a mid- to upper-class Italian restaurant, bought overpriced flowers at the best convenience store in town, then donned the semi-formal outfits that drew lukewarm compliments last year… And isn’t that what real relationships are all about?
-crickets chirping-
Of course not! Real relationships are all about dynamic communication, characterized by that unmistakable "spark"! And real romance is driven by pleasant surprises from that special somebody who cares deeply about investing in the relationship.
Today we explore a few ways that you can give the gift of romance to your private money lenders – which will in turn give you the gift of happy, long-term partnerships (and maybe even a happy referral or two).
Hang with me here and all will become clear – and keep reading for some very special tips we’ve created just for you :-)
Private Money & Dating
You may have heard me say before that “Private Money = Relationships”. And it’s true. While many don’t love to hear it, the fact is that we’re in a relationships business, no two ways about it.
However most people tend to only think of this in terms of getting a “first date” with a private money partner (agreeing to fund that first deal) and fail to realize an obvious truth: Just like in the regular world, a first date is only a first date – it’s only the start!
After the first date, you can only ride those fluttery feelings of infatuation for so long. From there you have to intentionally keep the romance alive – you have to keep them infatuated and interested in going out with you over and over again.
I have a few specific ways I’ve been doing this over the years and have been teaching others to do the same with great results – a few simple, but very effective personal “touches” that really help keep the sparks flying and keep my private lenders thinking fondly of me.
Here are a few of them (described in greater detail within the video below)…
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A First Date “Thank You” Card
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A Short “Welcome” Letter (see sample attached)
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Status Updates Before Closing
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A “Payoff” Letter
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A “Happy Anniversary” Letter
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A “Year End” Letter
Building Emotional Capital
The idea here is pretty simple really: Give your private money partners little reminders that you value them and their business, and that you’re interested in a long-term business relationship. Show them how much you care, surpass their expectations, and you’ll earn some major emotional capital.
And the emotional capital you build with your private money lenders in this regard can be converted into actual capital in two very important ways:
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More repeat deals with the same partners (You make money for them and you make them feel so good – why wouldn’t they want to keep dating you?)
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Warm referrals to new private money partners (After all, who doesn’t like to brag a little about their best relationships?)
Basically, when a private money partner agrees to fund a deal, they’re agreeing to nothing more than a first date. High-quality long-term relationships aren’t built overnight or without a little effort. And it’s certainly worth the time and effort – although most investors never even think of it. Use my “touches” below (and whatever else you can think of) to keep them interested in dating you for the long haul.
To further explain this concept, we turn to Patrick Riddle, a veteran real estate investor and our resident private money Romeo.
Patrick Riddle Explains How to Keep the “Romance” Alive…
{Mogul Elite: Download a Sample Private Investor Welcome Letter, plus a transcript and MP3 of this video in the Power Pack tools for this lesson.}
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Prioritize – Prioritize your efforts to maintain a vibrant relationship with each private money lender in your life. Good relationships with private money lenders will open the door to reinvestments and referrals.
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Communicate Proactively. Communicate proactively with your private money lenders, both during and after your investment of their funds. This constant contact from you will remind them that their funds have been entrusted (and will continue to be entrusted) to someone who sincerely cares about their business.
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Send a First Date “Thank You” Card to Each Lender. This is just a simple, hand-written message sent promptly after your first meeting with a potential private lender. Hand-written notes are a dying art and really make an impact when not expected. This extra touch literally only take a couple of minutes and does wonders for letting them know you really value them personally.
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Send “Welcome” Letters to Your Lenders. Once someone agrees to fund a first deal, send a short letter warmly welcoming them and reminding them that long-term relationships are important to you, and that serving them well is your top priority. Major brownie points here :-) You can see a sample of the one we use as a Power Pack tool attached to this lesson.
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Provide Status Updates before Closing. Most investors only talk to their private money partners when they need something or something is wrong. No one likes being in the dark or bugging you for updates. So take the opposite approach by proactively giving written status updates to your lenders on regular intervals leading up to closing. Staying in constant contact like this really reinforces your commitment to take great care of them.
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Send “Happy Anniversary” Letters to Your Lenders. That’s right, on the 1-year anniversary of your first deal together (and annually after that), you should send an anniversary letter to thank them for their business and the relationship you’re building together. No one expects this! You want them to know that you hope their first year together has exceeded their expectations, that you’re in this for the long haul, and you eagerly welcome their input at any time. Your aim is to create not just clients, but raving fans.
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Send Year-End Letters to Your Lenders. This letter is a good chance to remind them of the year’s progress, including interest earned, monthly payments made on time, and any other financials that can make them feel good (and make you look like a champ). Remind them how much money you’ve made for them and how much you value your relationship with them.
Patrick Riddle
has been investing in real estate ever since he got the bug in college at Clemson University and - to his parents dismay - dropped out of college to dive full-time into real estate at the age of 22 with a couple friends/partners from school.
The first few deals were rough for them, mainly using their own cash, credit, and hard money loans. But, soon he found out that was a rough and unsustainable way to build a real estate business.
After "on the job" learning through the school of hard knocks at first, he found the key that helped their company get deals done more quickly, with higher profit, less risk, without having to go to banks or use their own cash.
Fast forward to today, their company has closed over 130 real estate transactions and has put over $6 million in private money into their own transactions.