Are you talking to everyone you come in contact with about what you do? Just your enthusiasm and your success stories can be enough to raise all the private money you’ll ever need.
Our first private money came from a conversation on the golf course. This was before we’d even thought about searching for private lenders, though we’d heard of them. My husband was out on the golf course one day with a co-worker, someone we would never have considered approaching for money in the first place because, after all, he worked where we did so how in the world could he have any money saved?
Well, Jim was telling him about what we’d been doing with real estate and about a deal we were working on but didn’t know where we’d get the money to do it. Jim didn’t ask for anything, he was just sharing what was going on in our lives and he was excited about it. As they walked off the course heading to their cars, our friend said, “I have enough money to do that deal. Do you think it’s something we could do together?” That was the unexpected beginning to a years long private money relationship.
Our next private money came from the father of one of our lifelong friends. We were, naturally, sharing over time with our friend about our enthusiasm and successes with real estate. Unexpectedly, this friend’s father called and said that he’d heard about what we were doing, had money he wanted to take out of his unsuccessful retirement account, and could we use it to do some deals. Again, the beginning of a years long, very successful, private money relationship.
We have never solicited private funds but we have private money lenders from around the country. How? Simple conversations about what we do and our successful history with real estate investing.
Don’t worry that you need to buy a packet on how to raise money. Don’t think you need to hold “investor” meetings where you speak before groups. Simply talk to people you know about what you do and how.
Most of our investors started out with small amounts. Naturally, they want to see success and be comfortable with who we are and how we run our business and our relationships with them. Over time, every investor has added more money to their investing.
And friends tell friends and family members tell family members. Because of this, you actually need very few investors to accumulate quite a bit of money over time.
What’s been your experience with raising private money? What success secrets can you share?