7 Steps to Private Money
by John Burley
There is a Major Flaw in Real Estate Investing that very few people want to admit, and fewer still have the answers for how to overcome it.
The major flaw with Real Estate Investing is not the education. There are a tremendous number of great educators out there, who provide really great content. It is also not that you didn’t study the courses and didn’t learn from them. I know that many of you did genuinely go through the courses and then try to follow them, giving it your full effort. I followed that path too.
I have been a Real Estate Investor for over 35 years and an educator for over 25 years. I have completed over 2,000 Deals. What I found by working with (beginning and experienced) Real Estate Investors for that long, is that for most, fear comes up and stops them from getting what they want. There is too much of a gap around lack of money to get through the fear about how you are going to invest in real estate. For many, it is just too much to overcome.
This Real Estate Investment Business is so incredible, it provides so many benefits for so many people. It can provide an incredible living for your family and a secure financial future. It provides people with home ownership and incredible opportunities for themselves. It is truly a business that all parties involved can benefit greatly from each business transaction.
Why is it that most investors are never able to overcome that fear and get what they truly desire?
They simply never had a plan that would put consistent money in their pocket fast enough for them to make it before they quit. I have that plan and I am going to share it with you here.
The key to making it in real estate is getting paid upfront on every deal that you do. I do that by raising private money and creating a business transaction with my investor. I structure it so that I get paid upfront on the deal, during the deal, and at the end. And you can too.
Here is how you do it.
When I am going through and showing others how to raise private money, I have a simple 7-step process that I am going to share with you. Now, before we get started, I am going to tell you that this process is fairly easy. But it is a process, and all 7 steps must be followed. Just like the fast-food business and hamburgers. You can’t skip a step and still end up with the same finished product. This is no different. All 7 steps must be followed and in order to create the desired outcome – money in your pocket to live now and invest in real estate.
Let me tell you what the 7 steps are and then I will go into each one in more depth.
- Decide and Commit
- The List
- The Presentation
Now let’s dive into each one in a little more depth.
- Decide and Commit – By far this is the most important step in the whole process. Deciding what to do and then committing, psychologically and emotionally. This is what I want, and this is what I am going to do. Most business owners quit right before the end. History is full of stories, with one of the most famous being told in the book – Three Feet from Gold.
Most people start, put some effort in and don’t generate any results, and then just quit. To me, deciding and then committing to something means there is no other option but to move forward until I reach my goal. I would encourage you to do the same.
- The List – You must put the horse in front of the cart. What I mean by that is go find the money before the real estate. You are spending your time and energy working hard to make sure you have the best deal possible. Lots of fear comes up for nearly everyone I know. You don’t want to be fighting that fear of the deal and fear of finding the money at the same time.
- Presentation – This starts with an elevator talk. A 30-second talk where you describe exactly what you do in under 30 seconds. Completely, concisely, and confidently. From there you move into the presentation focusing on the “7 Talking Points”. These are what are most important to every investor. The most important thing to nearly every potential Capital Investor is Safety and Security, not Return on Investment (ROI). If it was ROI, then everyone would have all their money in the highest returning things all the time. There would be no reason to invest in Certificates of Deposit (CD’s) with banks paying 1.5 to 2%, would there?
- Acquisition – This is understanding your market and how to properly focus on return, not just price. How to buy, what to buy, and where to buy. Most Real Estate Investors focus on this part of the system, and it is the 4th step for a reason. You are wasting your time learning the market and making offers on properties that you don’t have the money to buy. I too have heard the saying, “Find a great deal and the money will show up.” I am here to tell you that is false. It again is all about the ROI equation and that is not why people put money with you for a deal.
- Preparation – How to properly set up that property for re-marketing. I focus on the cash flow game. Getting great cash flow on every property that I acquire. I am looking for long-term cash flow for each investment property, not just short-term income. The way to do that is to know what you are doing to rehab the house with an eye towards the person moving into that home. There is a lot that goes into the preparation and re-marketing that is simply overlooked while the investor chases down that next deal.
- Remarketing the property – To remarket a property, the first thing you need to do is ignore what most other people are doing and what most businesses do. The best way to remarket a home is to focus on the 3 to 5-mile area around the investment property house. That is where your tenant or new buyer is going to come from. In some cases, they are friends/family of someone within just a few blocks of the home. Marketing is first about identifying the target market, in this case, location, and then creating your message to match that market.
- Administration – Every great system requires some paperwork and organization. It does not require a full-time office person. What it does require is a basic system for keeping organized and on track while you continue to grow.
That is the 7-Step process that I take every investor through as they get started investing in real estate. I have worked this same process for my 35-plus years of real estate investing and have taught it to hundreds of thousands of others over the last 25 years. Follow the 7 steps to achieve great success.