I received an email from Tim Redding the other day. He bought a copy of my Private Lending Essentials CD set the about a week ago and just received them in the mail. Here is a copy of his email:

“Hey Paul, I got the CDs in the mail yesterday and I listened to the first two. I believe what you say about finding private lenders but I am having trouble getting my head wrapped around one thing. Why would someone want to lend money on real estate when the value of real estate is going down all over the country? How can I talk them into lending me money that is risky like that?”

Tim, thanks for sending in your question. I first want to address the underlying tone of the question okay? You seem to be thinking that all real estate is risky and that all real estate values are going down. I can see how you would be of that opinion based upon the overall negative attitude regarding the Economy and Real Estate in the news.

If you think this way then you will not be confident in your business or in the deal. That will show through to the potential lender as doubt and lack of confidence. You will not be successful finding lenders with this attitude.

First realize that real estate values are local not national. I know of specific areas that have increasing values right now this week in my target market. The increasing values have slowed down in these areas but not stopped inching upwards.

Another thing is that you cannot nor should you ever “Talk” anyone into anything. I explain the benefits and inform people what is in it for them. I let them determine whether or not they should invest based upon their own criteria and values.

I show them a professional credibility kit and a professional property package. The credibility kit shows them why work with me. The property package informs them of the pertinent deal information including the property value, loan to value and my intended exit strategy. It explains why this deal may be right for them.

You are really helping people by offering them the opportunity to earn a good rate of return on their money. If you look at it as an exercise in selling rather than assisting someone meet their goals then you are only looking at it from a selfish perspective and people won’t trust you.

I played racquetball with a friend the other day, he was planning on moving his IRAs over to a self-directed IRA last summer but he let it slide. I reminded him several times last summer but never pushed him. He was telling me that he lost several hundred thousand dollars last September and October.

Do you think he would have minded if I had been a little more aggressive in reminding him to switch to a self directed plan? Then he would have been a little ticked. But he would have been thanking me now. Instead he decided he can’t afford to take the money out of the market because he wants it to recover before he does.

Please remember that you are only helping them by getting their money working harder for them. By adjusting your attitude and mental thought you can do many people a lot of good. By working with them properly and utilizing the proper professionals you are the hero in today’s economic climate.

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