Private Money Investors And Private Money Lenders: How Do You Gain Access?
When your project needs private money investors or private money lenders where do you go? How do you find a private investor or private lender?
If you have a great idea for a business or a great deal in real estate that needs private money investors, it can be difficult to locate the investors you are seeking. Why is that? Well, the main reason is that these types of people who have the resources to invest in any deal they want basically don’t want you to have immediate access to them.
If You Were A Private Money Investor How Would You Feel?
Just think about it. If you were a person of substantial means and had the money to be a private money investor, would you want everyone knowing that you had a lot of money? What do you think would happen then? Most likely your phone would be ringing off the hook every minute of the day. Your email inbox would be flooded with offers to invest your money in all kinds of enterprises. You’d receive tons of mail in your mail box and your privacy would be totally obliterated. You’d find it hard to go anywhere without someone offering you a spectacular opportunity to invest your money.
Where do you find private money investors and private money lenders?
Since private money investors are essentially private, they find some way to shield themselves from the hoards of people seeking their money. They like to remain anonymous.
Since these private investors and private lenders don’t want to be found by everyone, they have either an organization or agent who does all the screening of the people seeking money and funding for projects. They hire gate keepers to ensure their privacy. In most cases you’ll only deal with the gate keepers until your project is deemed worthy to pass on to the private investor or private lender.
Private Money Investing Is Not Like Loaning At A Bank
When you’re seeking funding for your project from a private investor, it’s not the same as going to a bank for a loan. The private money investor is looking at your project differently. Sure the investor wants to see your business plan and make sure that your idea is sound. But the private investor is looking for a whole lot more.
When you go to a bank for a loan you present your project in terms of numbers on a sheet of paper. You may talk with the loan officer about your project and explain something about the numbers you have generated. But, in most cases you don’t end up talking to the bank’s board of directors about your project and your loan request.
The Bank Loan Approval Process – Fit The Guidelines
With a bank loan, you fill out an application on the bank’s specific forms. You provide the information in the format that the bank is looking for. You fill in their boxes. You specify the type of loan you’re looking for. Depending upon the loan type, your paperwork goes to a specific department to be reviewed. In most cases the officer in charge of that department is the one who authorizes or denies your request. It’s his or her signature on the approval or denial letter.
Bank Employees Do The Loan Screening
But the main thing to keep in mind is that other employees are the ones who do the reviewing of your paperwork. It’s these employees who follow the guidelines of what can and can’t be approved. So, the end result is that if your project fits within the guidelines, it’s approved, otherwise it’s rejected.
Private Money Investors Want More Than Just Numbers
When you’re seeking funding for your project from a private money investor, the investor is looking for more than numbers on a page. It may be the numbers that caught the investor’s eye, or it may be the concept that you’re proposing. But the numbers are there to show that there is a good return on investment (ROI) for the investor. That’s all.
Private Money Investors Want To Know What’s Behind The Numbers
When you present your project to a private money investor, the numbers may get you in the door, but once you’re in, you need much more. With private investors they want to know who the principal is. Who is running the show?
So, What Do Private Money Investors Want?
Most of all they want a viable project that makes money. If they are going to invest, they are looking for the best investment, not just a place to put their money. They want ROI.
That’s right. You have to show these private money investors that you have the following:
- Your project actually makes money. The profit margin MUST be there. They are not looking to give their money away. They want a return on their investment and without a good profit that won’t happen.
- You must know what you are doing. You have to be able to demonstrate that you can pull it off with a prior history of accomplishments. But it doesn’t have to be just you. If you don’t have the experience, can you assemble a team of professionals working for or with you who know how to do what you propose and do they have a prior history of accomplishments?
- Your project must have an exit point for the investors. The investors want to know when they will get their money back with their profit. They usually want to get their money back in 5 years or less.
- Can they be just the partner who provides you the money and not the person who ends up running your business or performing your project?
- In short, can you deliver the goods without any hassle and provide a reasonable expectation of success with minimum risk.
Here’s How You Can Gain Access To Private Money Investors
First your proposal must be strong enough to get to a private money investor. It must have not just good but great promise. It can’t be another pizza parlor around the corner where there are already a dozen. It must have some unique quality to it, something that stands out. So how do you start?
It’s Your Job To Get Through The Gate Keepers
First you must get through the gate keepers mentioned above. Frame your project so that it is really enticing to anyone who reads it. Because what you propose on paper will be your calling card. If that isn’t good enough to get through the gate keeper you’ll never get to an investor.
Then check out the links on our web site. These are the gate keepers, the organizations and agents of the private money investors. At least one of them will be the one you’re looking for. And with the right proposal you’ll make it through the gate keepers to the private money investors.
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