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PRIVATE MONEY NUGGET #2
Who Do I Raise Private Money From?
After raising capital for decades, my mentor came to some conclusions regarding private money.
The first is that 99% of all private lenders will fall into 3 categories (1% is set aside for anomalies like lottery winners or inheritances). Those 3 categories are Business Owners, Licensed Professionals, and Real Estate Professionals.
If you look at private lenders you've worked with in the past, check out their pedigree and I'm sure you'll come to agree with him.
1) Business Owners
Why business owners? Because they are a unique breed... entrepreneurs, thus more likely to think outside of the box. Also, they have no one to contribute to their retirements. For this reason, business owners are more likely to have Individual Retirement Accounts (IRAs), which can be converted to a self-directed IRA.
2) Licensed Professionals
These are doctors, lawyers, engineers, etc. Based on their higher education alone, they are more likely to realize that they need to diversify their investments and retirement funds. Again, more likely to have an IRA or be open to opening one up.
3) Real Estate Professionals
These include RE brokers and Realtors, mortgage professionals, surveyors, appraisers, contractors, and, of course, investors, etc. Why them? Well, they also fall into the thought processes of the first two groups, with the added benefit that they already know the power of real estate.
Here is a quick nugget for you under this category: Mobile home park owners make awesome private lenders, and we have converted quite a few of them into personal backers.
A) They understand the power of real estate;
B) They understand cashflow; and
C) They have used owner financing and creative financing, so private lending is not far outside their wheelhouse.
I am so excited about the next video I'll record for you. In it, I will describe the 2 questions that you absolutely must ask your seller after you’ve closed your deal. (Hint: 90% do not ask these questions and end up leaving millions on the table.)
Private Money Versus Hard Money
Who Do I Raise Private Money From?
2 Questions You Must Ask Every Seller
Where to Find the Best Private Money Lenders
How to Ask For Private Money Properly
Questions? Contact Us!
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