Bottom line ... MAKE THE CALLS

For more on this read Networking with the Affluent
by Thomas J. Stanley.)

As with your contacts keep calling until you make
it through every attorney listed in the Yellow Pages.
If you get sent to voice mail, speak your opener
onto the voice mail in an upbeat voice.

After calling all the attorneys listed in the Yellow
Pages in your town or city, it is very unlikely you
won't have your deal fully funded. If need be though,
move on to doctors, dentists, landlords, business
owners in the town you are investing in.

You may be getting worn out just reading about all
this phone calling. Just bear in mind, you have a
deal under contract that is going to provide you
with a five figure monthly cashflow, and over the
next ten years add a couple million dollars to your
net worth.

The fire of that vision should be driving you. But
if it's not, just think about how $10,000 coming
in every month, automatically, can change how you
live your life, and that $10,000 monthly is your
reward for making all these phone calls.

Bottom line ... MAKE THE CALLS!

Accredited Investors
There are some rules you have to play by when you
are raising private money, and we'll talk about
the SEC in a minute, but if you have a bit of a
bankroll and you trying to raise a large sum of
money, say, over $1M, you can do a general
solicitation to a class of investor known as
"accredited investors"

These are people with an annual income of more than
$200K, a joint income of more than $300,000 or a
net worth in excess of $1M.

Just as you set up a two step mailing process
to get motivated sellers calling you, you can
do the same to get private lenders calling you.

But only with accredited investors. Accredited
investors are exempt from the SEC rules barring
general soliciation to the public, so you can
market to them in whatever way you think will
be most effective.

Warning! DO NOT send mailings to people about
private lending UNLESS they are Acredited Investors.

An example of an effective mailing to accredited
investors would be:

- buy list of Acredited Investors.
(e.g. http://www.ltbj.com/accreditedinvestorsleads.html)

- send postcard asking them to call a free recorded
message to order a free report.
- before sending the report, call the person up
to verify they are an accredited investor. Answer
any questions they have about the deal.
- send free report.
- follow up after 5 days, ask if they are interested.
Answer any further questions they have.
- If interested, send deal package.
- Follow up four days later, ask if they would like
to invest.
- If yes, give wiring instructions. If no, ask if
they would like you to contact them with other
private lending opportunities.

As with calling your contacts and professionals,
mailing Accredited investors is a numbers game.
Direct mail standards apply. Expect 1-2% response.
A 1,000 postcard mailing may generate 15 responses.
However those 15 are highly qualified calls, and
followup is key. As you followup with each lead,
the longer they stay with you, wanting you to continue
following up with them, the higher the likelihood
they will become a private lender and invest
with you.

Even if they don't, at the end of your process they
will have received a lot of information from you
and if you have treated them well you will have
built trust, good rapport and established yourself
as an expert in the field of providing safe, high
returns. Odds are in your favor they will refer you,
or invest later when the time is right for them.
are very good

The bottom line with Accredited Investors though
is, the more you mail to the more quickly you will
get to those who want to invest.

If you have a few thousand to send on mailing,
Accredited investors are a great source of
private lenders.

The SEC - What NOT To Do!
This is the part about private money that usually
scares people into not wanting to use it, and that¨
is ... tangling with the SEC.

The Securities Excahange Commission was set up in
1993 after the '29 stock market crash, with it's
mandate to "protect the public" from undue risk
inherent in investing in capital markets.

So the primary SEC rule that deals with our efforts
to find private money deal with what the SEC calls
"general solicitation".

This means that if you are offering a security then
you can't go out and solicit the general public
in a public forum (like newspapers, TV, radio) to
buy your investment opportunity, unless you have
a securities license.

The Four Part Formula
So how do you go out and find private lenders,
who may not be accredited investors, without
engaging in "general solicitation"?

There is a four part formula, that if you follow,
will keep you in bounds with the SEC, and any
state securities division (consult your attorney
for additional state rules that my apply).

Predisposed To Real Estate
The first part of the four part formula is to
only approach people who have already demonstrated
they have an interest in real estate investing. You
don't have to educate them about the merits of
investing in real estate, they are already sold
on it. All you have to do is convince them about
you and your deal.

Examples of this would be, real estate networking
events, your local real estate investors association,
landlord associations, anywhere people familiar
with real estate gather.

Control
The second part of the formula is Control. This
means they can get their money out of the deal if
you don't perform.

It also means they never have to just "trust you".
They don't write you a check, they wire the money
to an escrow officer who is conducting an insured
closing. The funds are secured by a lien on the
title to the property. Money for rehab is only
released after the work has been completed.

These procedures give the investor control over
the funds they have invested in the property.

No Risk - Low Risk
The third part of the formula is low/no risk. This
means the investor feels that their investment is
secure. They can see and fully understand that even
if everything goes all wrong, they still get their
money back.

One of the real strengths of investing in real
estate is that you have a hard asset serving as
collateral. The title is insured, the property and
structures are insured, and even the life of the
property owner can be insured.