Which Comes First – Deal Finding Or De...

egg Today I want to tackle a question I get all the time from investors.

“Should I focus on finding a good deal, or should I focus on funding first?"

I can certainly understand why this can seem a little bit confusing. After all, it’s the chicken or the egg, right? Should you focus on finding the deals first or finding the private money you need, so that you can actually close on them?

Here’s What I Suggest…

First off, I feel your first action step should be to map out your marketing plan. How are you going to get your phone ringing with motivated sellers?

Now, why do I suggest crafting a marketing plan for your first action step?

Well let’s say you go out and get a great deal under contract, but you don’t quite have the funding lined up yet. You probably already know that you can put an “out” in place (i.e. an inspection or financing contingency) so that, if you either can’t find a buyer or can’t get funding for the deal, you can pull back from the deal and you’re out clean.

Believe it or not, it’s not finding or funding deals that keep most budding investors from ever getting those first few deals done. Most of the time, its inaction, due to procrastination, due to fear.

And by far the best cure for fear is to force yourself to take action in the face of fear and uncertainty.

Ralph Waldo Emerson said: “Do the thing you fear and the death of fear is certain.”

This is why I say you should start marketing ASAP to start generating leads fast, whether you have your funding lined up or not. Because no matter what, you’ll at least get the experience of talking to sellers, negotiating with them, contracting property, and so on. And this action-based experience is worth tons in getting you over the “new investor” hump and getting your first deal notched in your belt.

Both/And…

At the same time, I don’t want you to ignore your funding needs.

In fact, I actually want you to start both at the same time – while you’re out there marketing and/or hunting for deals, go ahead and start taking action on securing the funding you need.

As I said, you can put a deal under contract and then potentially wholesale it for some quick cash – typically a couple thousand here or there. But ultimately you want to have private money at your disposal. Cultivating relationships with private money prospects that eventually turn into lenders – that’s how you make the big chunks of money. But you’ve got to start somewhere, and start as soon as possible.

First, map out that marketing plan and immediately start generating leads. And at the same time, in essence, you should start spreading word wide, far and frequently about your private lending program, and work on cultivating good personal relationships with those prospects, so it will all come together for you.

A Recent Story…

This kind of reminded me, just this past week, one of our students –Butch out of Texas – we did a case study on him a few months ago. He had run out of his own funds to use in his deals, but he had a great deal under contract.

So Butch joined up with us. We helped him through the process to find private money to close that deal.

He just e-mailed me this past week. He calculated the net profits, brought all of his numbers together, and in the end Butch made over $30K on that one deal. He said it’s the most he has ever made on any deal up to now. Congratulations, Butch for taking action!

Bottom Line…

Go as fast and hard as you can to get your phone ringing with seller leads. Start that marketing plan, and at the same time, go ahead and start building those private money relationship, so you can actually close those deals and make the big money just like Butch did. In the meantime, you’ll learn a heck of a lot and might even wholesale a few, nice and easy like!