How to Get More Private Money

This is the best time of the year to plant seeds for private money.

Between Thanksgiving and New Year’s Day, there are lots of opportunities to interact with folks that you may not see very much during the rest of the year.

Plus, everyone is more relaxed. They’re taking time off from work and socializing a lot more. This goes for work as well.

To plant a seed, when someone asks you what you’ve been up to, casually mention that you’re in real estate investing.  What you’ll find is that when most folks hear that you’re doing something different, they’ll be curious to know more. So they’ll ask. Casually answer their questions, and when they stop asking, stop talking about it.

The important thing is, DO NOT jump down their throats and bombard them with what you’re doing. That will just turn them off. Also – never, ever, ask anyone for money. And I mean never.

I’m constantly surprised how many folks have approached me months later and asked to hear more about what I’m doing in real estate, even when they appeared only casually interested when I first brought it up.

 

Stock Market is Now DOWN for the Year. What’s in YOUR Wallet?

dennisfassett.comIt has been a pretty good ride, hasn’t it?

I mean, since the dark days of the “great recession” when the DOW bottomed out at 6443.27 on March 6, 2009, the market has gone pretty much straight up.

Remember those guys in the office that spent all day with a browser window open to their E-Trade accounts so they could “trade” their mutual funds?

They were all over the place before the DOW tanked. They got killed during the crash. And now that they’ve built their 401ks back up a little, they’re back with a vengeance and they’ve all been partying.

Which is all cool. I don’t ever begrudge anyone their success.

But the funny thing I’m noticing is that people have really short memories. One of those trader-guys even told me that the same thing can’t happen again “because the government won’t let it”.

Wow.

The other thing I’ve noticed recently is that those guys are a bit less euphoric. The reason is pretty easy to determine.

The DOW closed at 16,576 on December 31, 2013. Last Friday it closed at 16,544.

So those clowns day trading their index funds are now negative for the year.

Landlord Friendly Financing? Seriously?

dennisfassett.comThis is pretty amazing.

I was looking around for some new ideas on how to finance additional rental properties, and I happened to find something that was pretty surprising…..

…… that a monster-sized hedge fund – BLACKSTONE no less – has started offering financing specifically focused on rental property owners.

Yeah. To say I was shocked was an understatement.

I mean, Blackstone has been the bad guy as they hoovered up all the good deals in many areas over the last several years.

But that has apparently changed.

I have never been very fond of conventional lenders. They don’t like rental properties, and back before and during the crash they kept making it more and more difficult to get their approval.

In fact, the process to get my 10th conforming mortgage took SIX MONTHS to accomplish. Partially due to the broker’s incompetence, but most of it was due to the lender changing he rules of the game as the game was being played.

So the fact that an organization is now landlord friendly is a great thing.

I’ve included the text from the press release below, and there’s a link to their lending site as well if you’d like to get more information.

Let me know how it goes if you decide to reach out to them.

Here’s the press release from Blackstone….

“Personal Guarantees are STUPID!”

Wow.

I just received another screeching email from a self-proclaimed guru bragging about how he just did another risky deal with private money from a new private lender in a crap-hole neighborhood that he would never buy in with his own money, and that he didn’t even have to offer a personal guarantee because the lender didn’t know enough to ask for it.

Bravo Sparky. Bravo.

You took advantage of someone that didn’t know any better. I’ll bet your mother is SO proud.

And the crime of it is, he’s far from the only one that does this. I personally know several real estate investors that HAVE walked away from risky deals and left private lenders holding the bag. And that wouldn’t hesitate to do it again this afternoon if it suited them.

Some of them even brag about doing it. The amazing thing is that they continue to find new people that will lend to them.

It’s Private Money Ninja Time

Real Estate Private Money 101I’m sure you at least heard about the carnage in the stock market yesterday. The DJIA was down 391, which made this the third worst week for the stock market in history.

And it was only Thursday.

As I write this the market looks like it will open even lower this morning. And gold continued to fall overnight.

There doesn’t seem like there’s anywhere to turn, does it?

And that’s a good thing. A very good thing.

Because the more that people are scared of paper investments, like stocks, that they have absolutely no control over, the more they realize they want something different.

Something closer to home.

Something less risky.

4 Fatal Mistakes Make When Looking for Private Money – Part 2

The last post focused on the top two Fatal Mistakes that investors make when they’re on the prowl for private money. I continue here with Fatal Mistakes #3 and #4.

Private Money Mistake #3: The Complete Lack of Networking

I can hear the shouts right now – “HEY! I network – I attend three REIA meetings per month and I get together with my real estate buddies a couple of more times per month!!”.

Good for you. But to be blunt, when we’re talking about raising large sums of private money, spending time around other real estate investors is not “networking”. In fact, if your goal is private money, then hanging out with other real estate investors is probably the biggest waste of time possible.

Why?

Tell me this  – when was the last time you raised a single dollar of private money from another real estate investor?

Never? That’s what I thought. I haven’t either.

So while REIA meetings have their uses when they’re not pitching the latest fly-in fly-out guru crap, forget about them in your quest to expand your circle to find new potential private investors.

The trick is finding places where potential private investors hang out, then go hang out there yourself and meet and get to know some new people. But how do you discover where these potential private investors hang out? You need to start by creating a profile of your perfect private investor, then figuring out where they spend their time outside of work. That’s actually the easy part!

Have you done either of those things yet? If not, I suggest that you do. If for no other reason that nobody else is doing it, so you’ll start to separate yourself from the crowd of people looking for private money.

Private Money Mistake #4: No Third Party Credibility in Your Niche

What are you doing to get visible on the internet? To create a buzz about your business? To create the aura that you’re the “go-to” guy in your niche in your geographic area?

When I talked with my private investors and asked them how they came to the decision to give me money, every one of them told me that they had researched me on the internet and talked to others in the community, and in doing so they had come across my blog, or found my book on Amazon.com, or had seen the write-ups on me in Smart Money Magazine and CNNMoney.com, or had seen the write up on me in the local paper.

You need to be vitally aware that one of the very first things that someone is going to do after you ask them for money is google you and ask around.

Are you going to appear? I imagine you probably would, unless you happen to have an ultra common name I suppose.

But the more important question though is – are you going to appear with anything relevant to your real estate niche? Using myself as an example, I can confidently say that within 30 seconds of googling me a complete stranger would know that I’m an experienced cash flow real estate investor presently focusing on suburban apartment buildings. In addition, if the same people asked about me around the neighborhood – guess what? They’d hear exactly the same thing about me.

Because that’s what I write about in my blog, that’s what I wrote a book about, that’s what the Smart Money Magazine and CNNMoney.com write-ups are about, that’s what all the pictures and videos that I post are about, and that’s what I talk to my neighbors and friends about.

Are you that identified with your niche?

Not doing this is a huge mistake by real estate investors, because they miss a great opportunity to stand out from the rest of the crowd looking for private money. The good news about this is that while it will take some time, effort, and energy on your part to make this happen, it will take far less than you think.

Because virtually nobody else is doing it.