Editor’s note: Alekxey Sabido, Eddie Miller’s partner, will join a panel at DREIA on April 20th called SHOW ME THE MONEY! He’ll be discussing how he and Eddie run their business, Miami Property Solutions, LLC, with private money. Bring your questions!
In the fall of 2008 when the US economy shifted, so did my entire life. I was a project manager for one of the largest commercial interior construction companies in Miami. Almost instantly, construction came to a standstill, and I was left without a job.
Late one night a few months later there was an infomercial for investing in real estate, which led me to researching the top real estate gurus on the internet. The only way to decipher between them all was to pick the one who had the most positive and least negative comments about them, and who had a proven track record. Within two weeks my partner, Alekxey Sabido, and I were sitting in one of Ron LeGrand’s training seminars. We left that seminar with a determination to make this business work.
As they say “Cash is King” and raising private funds is vital to real estate investing. However, I have found with my students and other investors that they view raising private money as a major challenge. But I’m going to share with you my secret and how easy it really is to do.
In the beginning I was like most, afraid to talk with people about investing in real estate. I had no credibility—I was the guy without a job. Then I created what I now call the Investment Opportunity One-Sheet. This document reviews how individuals can get a higher return compared to what they are getting with CDs, annuities, stocks, and other investments; and how they could even invest using a self-directed IRA to get a 100% tax-free return. [Get a free copy at: http://www.EddieMiller.com look for the red box on the right-hand side of the page].
It also explains exactly how the process works, we don’t borrow more than 70% of the current after repair market value of the property, and that their investment is secured with a mortgage on the property. Plus, we provide a copy of the appraisal, title insurance, and fire/wind insurance policies to insure the security of their investment. Furthermore, we explain the entire transaction, including drawing up the paperwork, the escrow of their investment, and both closings (buying and selling), are handled by an attorney.
Then, in the next part of the process, Alekxey and I each made a list of people we knew that might be interested or might know someone who would be interested in investing. I stress might because you never know what money people have access to, or who they know. I promise you, if you make a list of 40 to 90 people from all over the world (including your family, friends, business contacts, and those you remotely know), these individuals will easily lead you to $250,000 in three months, and will likely lead you to $1 million or more. I promise! We raised over $1 million in our first year of business, and we had private lenders from the US, Mexico, and Europe. We started with family members and friends; then, as our confidence grew, we began talking with others.
We are ALWAYS adding new contacts to our prospect list from events that we attend—like parties and Chamber of Commerce meetings. And we are ALWAYS sharing with others about our real estate business, how we work with private lenders, and how we provide a higher return safely, securely, and ethically. The key is simply talking with people on a daily basis. Whether in person or on the phone, we simply walk-through the key points on our ‘one-sheet’, answer their questions, give or e-mail them the one-sheet, and follow-up with them to see if they are interested. If not, we ask for a referral. They might not be ready to invest right now, but they likely know someone who is. It really is as simple as that.
Most times as you’re talking with people, the conversation will just flow naturally and you’re able to share what you are doing. They get interested and you take it to the next step. You can also use what Ron suggests to initiate a conversation, “Do you have an IRA or any other investments not producing a high return safely?”
It is also critical to follow-up. Here is an example; we were having lunch with a good friend. Not expecting she had any money to invest, I simply mentioned that we were looking for a private lender for a new property we were buying and asked if she knew someone. She said she had a friend that might be interested. I sent an e-mail with the one-sheet for her to forward to her friend. When we followed up, her friend wasn’t interested, but she herself had $30,000 to invest. The exact amount we needed for one of our rehab projects. She is now on her third investment with us.
So, how do you face the fear of raising private money?
In the process of writing my latest book — Living Inside-Out: The Go-To Guide for the Overwhelmed, Overworked & Overcommitted, I discovered that behind ‘what we fear the most’ is enormous power for us, if we are only willing to ‘lean into our fear’. When your focused intention is to raise private funds, and your fear stops you right in your tracks, then lean into it with these simple steps:
- Set a goal of how much you want to raise and by what date.
- Download the Investment Opportunity One-Sheet and personalize it with your name and contact information
- Create a list of 40-90 people from all over the world, whoever comes to mind write their name down… don’t prejudge. Keep the list handy and always continue to add to it.
- Start first with family and friends to build your confidence; you will likely be surprised as to who says ‘yes’.
- Pick the Top 20 and take action; play a game with yourself that you won’t go to bed without contacting one new person each day.
- Create a “First to Know—Private Lender” e-mail list and as you buy and sell new properties send them an update. I even send before and after photos. Some lenders will join you 4-6 months after the initial contact, so keep in touch.
- Follow-up, make sure to follow-up within a week of the initial contact. If they say no, ask for a referral. Then add them to your “First to Know” list and periodically continue to follow-up. You are now ‘on their radar’.
By taking action you automatically ‘lean into your fear’. As a real estate investor, money equals freedom and power. You are free to make tons of offers on great deals, and you have the power to ‘make a killing’ in the REO market. Once you learn how easy it is to raise private funds, you will discover other money-making opportunities will open for you—like providing lease options. This way, when the economy shifts, you are in control as there are more options you can provide that others can’t.
Here is what Matt and Rich said after I challenged them with these seven steps…
“We were frustrated with our business and stuck in the crippling mindset that we were inadequate to acquire our own private lenders and expand our business. Eddie challenged us to overcome our reluctance and remove the pretense that we had little to offer our investors. We accepted the time sensitive challenge and got to work quickly. Most of the potential lenders we talked with were not turned off to the idea as we expected. On the contrary, we quickly acquired needed funds and were able to put them to work immediately. Because of Eddie’s leadership and encouragement, we have been able to secure over $200,000 of private money without working very hard for it. We are truly grateful.”
-Matt and Rich McLean, Knoxville, TN
You can do it too! Simply lean into your fear to discover the amazing power you have within.
**Eddie Miller and his partner, Alekxey Sabido, are the owners of Maimi Property Solutions LLC—one of the fast growing private real estate investor groups in South Florida. Eddie shares the strategies that are causing the excelerated growth of their company in the best-selling book The New Masters of Real Estate: Getting Deals Done in the New Economy. www.EddieMiller.com