Real Estate Investors: Where to Find Private Lenders and How to Get Their Undivided Attention

If you are starting out in real estate investment your initial challenge is gaining credibility with potential private lenders. The other challenge is how and where to find private lenders and how to get their undivided attention, especially if you are new to real estate investment.

Who Are Potential Private Lenders?

If you look around you, potential private lenders are everywhere. They could be your family, friends, and relatives or they could include business associates, employees, contractors, vendors, or anyone you do business with.

Private lenders could potentially be people that you would never suspect would be willing and able to invest in your real estate deal. Sometimes they are simply people from all walks of life, who are financially able to invest and are looking to get a higher rate of return on their investment. They do not even necessarily have to specialize as private lenders.

How to Connect with Private Lenders

Networking Events: Attend seminars, conventions, and professional networking group gatherings. Develop a great 60-second elevator speech and talk to everyone at these events. Ask them questions about themselves to get to know them. If they do not seem to be interested, ask them if they know of anyone who is interested and give them your business card.

Real Estate Entrepreneurs and Landlords: Try obtaining a list of real estate entrepreneurs, investors, and landlords and start networking with them. Perhaps they can also be part of your two-step direct response marketing plan. Send them a postcard or letter offering some free advice or information and encourage them to contact you. If possible call them up and speak to them directly.

Church Contacts and Neighbors: Sometimes the people you would least likely expect to be interested in your real estate deal are the people you see in your everyday life. This includes people you see at church, your neighbors, and friends of neighbors.

Many of these people have IRAs and other investments that are currently suffering during the economic downturn. Most likely these people would welcome a higher rate of return on investment and especially with someone they know.

Retirees: This is a great area to investigate because many retirees are looking to make more money in their retirement, especially during the current economic crisis. Many of the retirement plans for these people have suffered due to the current economic conditions.

Casual Contacts: Make an effort to talk to contacts while conducting your business or running weekend errands, going to the store, or waiting in line at the coffee shop. Have your elevator speech handy and casually strike up a conversation.

A Few Things to Remember

Once you have started connecting with potential private lenders here are a few tips to remember.

Show Concern for the Lender: When striking up a conversation, show concern for the person and tune in to their needs.

Be Concise and Stay on Topic: When talking about yourself be concise when explaining what you do and stay on the topic. Do not bore the other person with details about yourself they could care less about. Offer enough information that shows your expertise and show that you may have a solution to the other person's problem.

Keep a List: Maintain a list of everyone that contacts you for further information. In the beginning it will start with only a handful but, over time if you are consistent in trying to connect with private lenders, that list will grow and you will be able to cultivate it over and over again.