Posts Tagged ‘hard money lenders’

Most real estate investors are wondering if there is a list of private money lenders that they can buy. Really, there is not. You can buy a list for hard money lenders but not private money lenders. You can buy a list of certain demographics that fit the private lender profile such as business owners, people who has retirement accounts, people who buy Certificate of Deposits, or mutual funds and other types of investments and begin marketing to them. Private money lenders are people who have money that they are looking to invest and receive a higher rate of return. They are not in the business of lending money unlike hard money lenders.

So, the best way to find private money is through networking. You need to talk to different people such as friends, family, co-workers and let them know what you do. You also need to go to different associations such as Chamber of Commerce, Kiwanis Club, Rotary Club and start building relationship with everyone that you meet. You need to be comfortable talking to these people about your business and because if you don’t then you will not be able to earn their trust. It is hard for a lot of real estate investors to approach people for money and that is why it is important to develop a relationship first. When you met people for the first time, get to know them, ask a lot of questions, and focus on them. People love to talk about themselves and will open up to you. In doing so, you will be able to prescreen them, will be able to find out whether they could be a potential private lender for you or not, if they are then you can add them to your private lender list. This is how you build your coalition of private lenders. You need to have a constant communication with them even if you just want to say “Hi” or send them your marketing piece. That way when you get a property and you need private lender you can just pick up the phone and present the opportunity to that matches their needs.

When you do some kind of marketing to those people that you never met, you have to be extremely careful as how you do it because SEC has very strict guidelines on public solicitation. They don’t want to see you soliciting money from people that you don’t know unless you have permission to do so. There’s a way to get around it that will not violate the SEC laws.

So, to find sources of private money, you need to just get out there and become a networking machine. This is the only way people will be able to find out what you are looking for. And on the same token, there are so many people out there searching for other ways to invest their money safely and securely. It’s a win-win.