Hey all you REIers, Mogul advisor Patrick Riddle here today with a super easy process to help you get private lender’s money for your deals. It’s so great that I like to call it one of my Deep Content Training lessons.
I’m going to walk you through the big problem with getting private money. And it’s not what you think. Prepare for an AHA moment!
Listen, I’ve been in the trenches as a full time private money-getter for 10 years… and I’ve worked with thousands of investors, who desperately want private money for their deals, but they’re running into roadblocks and can’t get the funds – it’s all because of the broken process.
Here’s the thing though, I’ve figured out how this private money game is played and I’d like to show you how it’s done with my proven 3-step process for getting all the money you want and need for your deals.
It’s a structured sales process that gets your prospect interested and builds their desire. Do these steps, in the right order, and you’ll have private lenders beating down your door to fund your deals.
Look, if you’ve been frustrated, this is the easy fix. It’s simply the most effective process for getting private money.
The Formula
Before we jump into the 3 steps, you need to remember one thing: Private money = personal relationships.
You’re not going to get the money you need from some faceless investor; you have to establish and build a relationship.
There are a ton of people with money who are fed up with the stock market and not getting the returns they want – these are the exact kind of people that you want to groom to become your private investor. And you’ll do it by forming a relationship because you can provide them better returns through your real estate opportunities.
Okay, here we go…
Step 1: Big Picture and Pain
Let’s say you have a private money lender prospect. You just want to give them a high level, big picture. No details, no numbers, no rates, none of that. Peak their interest about the kind of opportunities that you have, so they’re yearning to learn more from you.
It’s kinda like playing hard to get, rather than say ‘I need your money,’ you drop a fish hook with bait by sharing with them the big picture and they’ll take that bait and start to pursue you. You are subtly courting them and it makes them want to choose you.
You wanna say something like:
“You know Ms. Prospect, with some of the things that I’m doing right now in my real estate investing, I would hate for you to figure out a year from now the kind of opportunities that I have, and be upset with me because I didn’t share them with you sooner. Look, this may not even interest you, which is fine, but would you like to get together so I can show you my brief presentation, and you know what, you might even be able to give me some feedback on it. Can we do that?”
And BOOM! You haven’t gone over any details, you simply painted the big picture and used some powerful wording to get them interested and wanting more. It’s more like a pitch for your presentation really.
If they start to ask details, you know you’ve achieved exactly what you set out to do in this step - you’ve raised their curiosity. When they ask you for details, that’s when you transition into Step 2.
But before I transition into explaining Step 2, I want to touch on the second part of Step 1, ‘Pain.’
No pain, no gain. When talking with potential prospects, you need to find out if they’re motivated. Just like you, I only want to work with motivated prospects, whether they’re buyers, sellers, or potential private lenders.
You’ll start asking them about they’re investing experience:
“I’m into REI, what kind of investing do you do? And how’s that working out for you? Tell me more…”
If they tell you they’ve lost money or aren’t making the returns they want, ask what they’ve done about it or what they’re going to do about it. Why? Because you’ve got to dig into that pain.
It sucks losing money and it sucks not getting the kind of return you expected, so when you ask them about this touchy subject, it will coax out their motivation and make it easier for you to transition to Step 2, which we’re going to do right now.
Step 2: Formal Appointment
Here’s where you’ve got a formal sit down with your prospect. You’ll show them a brief PowerPoint presentation that has info about your business and your deals.
Don’t freak out and think, ‘Oh man, this is too much work.’ I’ve made it easy for you because I want you to succeed. Download my free customizable PPT presentation (available to Mogul Elite members within this lesson’s PowerPack tools – located on the right-hand side of this screen), and then just plug in your info and walk your prospect through it.
It already has a sales process built within the presentation, so it does a lot of the work for you. But what most people don’t realize is that it’s not about overdoing it with details about whom you and your company are and the great opportunities – your presentation is really all about your prospect.
Don’t get me wrong, educating your prospect about who you are and what you do is necessary, but the purpose is really to dig in and get to know your prospect. You’re actually going to turn the tables and evaluate them.
That puts you in the reluctant role, which means you’ll be the one investigating whether they’d be a good prospect for you by finding out the answers to these questions:
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Are they right for your deal;
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Do they have the amount of funds needed;
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Will their funds be available in the timeframe needed;
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Do they have unrealistic returns?
You’re reversing the roles and positioning yourself in the authority position. You need to come away from your presentation having diagnosed your prospect and qualified them.
Look, if you don’t follow this structure and instead you go to a private money prospect and verbally throw up on them, spewing way too many details at the wrong time, that’s what won’t work. The process you’re learning right now does work. So, let’s move on to the final step.
Step 3. Follow Up with the Right Deals
Now, you’re armed with loads of important information that you gathered from doing Step 2. That info will help you determine the perfect type of investment deal to present to that specific prospect.
So all you have to do is follow up with them when you find the deal that best matches their goals and needs. When you do present it to them, the likelihood of them saying yes, skyrockets and before you know you’ve got private money to fund your deal.
All’s Well That Ends Well
And that’s it. This gets results. So right, commit to my 3-step process. You’ll be so glad you did!
Acknowledge Other Processes are Broken – If you’ve struggled with obtaining private lender’s money, it’s probably because the process you were using wasn’t the right way. Most people who fail are not following my simple 3-step process. Drop what you’ve been doing.
Paint the Big Picture – Ditch the details in the first step or you’ll scare them off. Gently coax them into pursuing you by saying you have some opportunities, but don’t give specifics. They’ll want more, trust me.
Dig into the Pain – If they’ve been unhappy with returns they’re getting elsewhere, you need to dig into their unhappiness. It affords you the opportunity to make a connection between their need to do something better with their money and how much better of a return they can get by being your money partner. Digging into that pain helps you elicit the motivation within them that will make them want to invest in your deals.
Present at an Appointment – At a formal appointment, use my free customizable PPT presentation to tell them a little bit about you, but you’ll mostly be acquiring vital information about them and the kinds of deals that you should bring to them.
Follow Up with the Right Deal – Now that you know more about your prospect, you’ll be able to present them with the right deal that fits their goals and needs. With the perfect deal (for them) in their lap, they’ll be more inclined to say: ‘Yes, please take my money!’