How to Raise Private Money for Real Estate Investing
Everyone wants to be an investor and make big money but wonders, “How can I raise funds for real estate?”
I’ll show you how to raise money for investment. Now, let’s get you started. This is going to be fun and very interesting.
I’m Ted Thomas, and I’ve been involved in the real estate business since 1970.
Today, you’ll learn about real estate that you can buy for 70%, 80%, and sometimes 90% discounts below the tax assessed value. I’ll show you how, and then we’ll use your new skills to gain money from private investors to purchase those bargain real estate properties.
Want to learn how to make big profits in real estate? Would you like to buy mortgage-free homes online for pennies on the dollar? Or earn double-digit interest rates secured by real estate? Then you don’t want to miss this FREE Mini Course.
How to Raise Private Money for Real Estate Investing:
Presenting an Irresistible Deal
Before we talk about how to raise capital for a real estate deal, I think it’s important to give you a little foundational material about purchasing real estate for pennies on the dollar.
This is one of the major elements that’s important when it comes to raising private seed money for real estate from investors. If a deal isn’t clearly a great deal, you’ll know it and so will the people you want to invest.
You’ll be getting deals that others don’t have a clue about and are not willing to learn about.
How to Raise Private Money for Real Estate Investing:
You Make Your Money When You Buy
Personally, I’ve found after many decades of purchasing and reselling, one rule is important. That rule is, and I suggest you burn this into your brain, and if you do, you have a good chance to become wealthy.
Here it is. You make your money in real estate when you buy and not when you sell. A lot of folks will argue this point.
I’ve lived and struggled through many up and down real estate markets. Every time, I ignored the rule, “You make your money when you buy,” I got my butt kicked….hard!
How to Raise Private Money for Real Estate Investing:
Understanding the Real Estate Market
So, how do you get those bargains? First of all, understand that real estate is just like the rest of the markets. The stock market goes up and down, and so does real estate.
The problem is, what if it goes down so much that it’s below the loan you made to buy it? Then you have a mortgage in excess of the value.
Here’s a solution. Let’s buy tax defaulted property at auction. Maybe you don’t know what that is.
How to Raise Private Money for Real Estate Investing:
About Tax Defaulted Property
The tax defaulted property auction is a government-mandated and administered process that’s been in use in local counties for over 200 years.
It works like this. All property owners are required to pay their fair share of operating the local government. It’s a very small tax to support the county employees, emergency services, and buy the books for the library.
Thousands of property owners run into problems, and they end up delinquent on property taxes which the county government will not tolerate.
If the property taxes aren’t collected, the county will seize the property and resell it to pay the taxes.
How to Raise Private Money for Real Estate Investing:
Tax Lien Certificates vs Tax Deeds
The county will do one of two things about unpaid property taxes.
If it’s a benevolent state, the county will issue a tax lien certificate, sell it at the auction and use the revenue to pay all the county bills. Approximately, half of the states sell tax lien certificates.
Not so with the tax deed states, like California and New York. In those states, the county will seize the property and evict the resident or tenant.
How to Raise Private Money for Real Estate Investing:
Tax Defaulted Auction Bargains
The treasurer will sell the seized property at a tax defaulted auction. The starting bids will be very close to the delinquent back taxes and could be 70%, 80% or 90% below the tax assessed value.
The mortgage will have been deleted, cleaned off of the official records. The title will show no mortgage.
Savvy bargain hunters buy these mortgage-free tax deed properties.
I have a free gift for you, a special Master Class that will show you how to profit with tax lien certificates and reveal the secrets of tax deed investing. Get your FREE gift today.
How to Raise Private Money for Real Estate Investing:
Pitching to Private Investors
Now let’s talk about how to raise private money for real estate investing. For example, a property with a $100,000 tax assessed value may be sold for an 80% discount, and private investors love this deal.
I think you’ll agree that this would look good to a prospective investor, so you’ll look good to the investor. The investor realizes you are a savvy entrepreneur.
So, how do you secure funding for an investment property? I’ll give you a number of clear steps that need to be thought out and practiced before you ask for money.
How to Raise Private Money for Real Estate Investing:
Step 1 – Rehearse Your Pitch
How do you raise private capital? First of all, you will be nervous because you’re doing something you need to do, and you are aware that without money you are going nowhere. My point is practice, practice and rehearse.
You are aware the answer to your request for money could be NO! More than likely, you’ll get no response to your request. At this point, I’ll tell you welcome to the club. You are nervous, but so is the investor.
How to Raise Private Money for Real Estate Investing:
Step 2 – Do Your Homework
My second recommendation is to fail forward fast. Pay attention to what you are saying. Later, you’ll figure out what you said wrong.
The truth is the world is full of people who are awash in money. There’s plenty of money, but the money is going to stay in their bank accounts and pockets until someone can show them a very convincing and compelling reason to invest.
Do your homework. Show them profits.
How to Raise Private Money for Real Estate Investing:
Step 3 – Don’t Ask for Too Much
Avoid this big mistake. Don’t ask anyone for $50,000. If you do, they will avoid you for months. The people you want to approach should be people you know who like and trust you.
If you need $50,000 for your deal, don’t ask for that much. Ask for small investments. It’s legal (I’m not giving you legal advice) up to 10 investors.
Don’t ask for $50,000. Explain what you are doing briefly, that you’re putting a few friends together, and as a group, you only want a small investment. Let’s say $5,000 or $7,000, keeping in mind most people don’t have $50,000.
The key is don’t embarrass or scare them, just inform them. Show why your deal is good, and let them think about it.
How to Raise Private Money for Real Estate Investing:
Step 4 – Adjust Your Mindset
Here’s a tip from an insider on how to get money to invest in real estate. Before you ask for money, any money, you must adjust your mindset. No investor is interested in you other than your mother.
They want money. They don’t care if you make money. They want safe, repetitious money for themselves.
Think, what do they want? Ask yourself again and again. What do they want?
How to Raise Private Money for Real Estate Investing:
Step 5 – Don’t Be Greedy
Stop being a cheapskate. What are you going to pay them? Is it something a bit over the bank rate? 5%, 7%, or 8 % when the banks are paying 1%?
I’ll tell you ahead of time. If you don’t change, you’re going to die poor. No one wants 7% or 8% or 9%, and they don’t care about the banks or if you ever make a dime. But you’d better not lose their money.
What’s the solution? Make them rich! Offer them 25% interest. Suddenly, you’ll find people are interested in you, and that’s how to raise private money for real estate investing successfully.
If you’d like to know more about bargain real estate investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
You can learn how to reap the huge rewards from tax lien and tax defaulted property investing! Get started today by taking advantage of Ted’s Free Master Class! Act now, it costs you nothing and will give you a big head start!
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