The 6 Steps to Developing Your Own Private Lending Program

What do you think your real estate investing business would be like if you had unlimited access to money for profitable deals? Imagine finding a great deal and be able to call up a private lender and outlining the deal and after some discussion the person yes how much money do you need and where can I send the check? Do you think you could get some price discounts from sellers when you knew you could close and close quickly? How would that affect your lifestyle?

This is possible for you if you committee the time and energy to develop a private lender program. It is not a get rich quick plan. You must be organized and have a well developed business plan and marketing plan to meet and develop private lenders and build relationships.

As part of private lending program you must have ways to attract private lenders to call or email you to start the process. Once a potential private lender has contact you must send them some information about your private lending program and then call them and set up a meeting to advance the discussion.

Here are 6 steps to a private lender program.

1) Business Plan: You must have a solid and believable business plan that fits your experience level and skill set. If you have only bought one or two properties you cannot tell a private investor you plan to buy 12 properties this year. This is not believable and the private lender will not lend you money. Your business plan must be well thought out and when you sit in front of a prospective investor it must be believable and achievable without being a stretch.

2) Credibility Kit: Building your personal Credibility Kit is going to be one of the most important tools in your real estate investing business. Nothing speaks louder or more clearly about you or your integrity than letters from your sellers, personal reference letters, letters from your lenders, copies of ads you have run, photos of properties you have bought and sold, testimonials and references, and certifications or professional licenses. The professionalism that a good Credibility Kit presents to private lenders is very powerful and shows you as a real estate investing expert.

3) Marketing Plan: You must have a good Marketing Plan including several different types of lead generating marketing to get potential private lenders to call you and request more information or come to your educational seminars. These methods can include post cards, flyers, networking within professional organizations, and group or one-on-one educational presentations. We do NOT recommend any big or public advertising such as newspapers or internet.

4) Follow-up and Presenting Deals: Once your marketing has generated some leads it is time to present deals. You may want to meet with the potential lenders in a one-on-one meeting and lay out why your real estate deal makes sense and how the investor’s money is well protected and what return they can expect to earn. You also may want to send out a short summary to a number of potential lenders and see if they are interested by having them call you for more information and details. If one of the lenders calls from your emails it is important to follow up and send both your Credibility Kit and deal summary for their review.

5) Legal Forms and Documents: One of the great advantages of private lending is how simple the forms are for a typical private lending transaction. In fact, most private lending transactions only involve four documents including a Mortgage or Deed of Trust, Promissory Note, Insurance and Disclosure Statement. The most important document is the Promissory Note and this is where you add certain clauses that allow you to control the deal and give you flexibility down the road.

6) Closing: Once you have a private lender ready to go and your forms prepared for the deal, it is time to close. I strongly recommend to my coaching students that they always close with a title clerk or attorney and let them prepare the closing documents and handle the money for you at closing. For the small fee they charge, it takes a lot of headaches away and adds a level of professionalism to your investing business. I also strongly recommend that the title clerk or attorney record the private lenders mortgage with the local county land records office.

I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by going to http://realestatewealthtoday.com/FREE-eBook.html .

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit.