Today I want to talk about some of the things that you need to do to keep your money lender happy and to keep them coming back to you to lend you money for your flips or your rentals. There are certain things that every private money lender expects from you as an investor.
There’s a lot of material out there on how to find money lenders, but there isn’t enough information on how to keep them happy and wanting to keep working with you. There are a lot of aspects of working with a lender that we can talk about, but today I want to cover some of the very basics of what you need to do.
- Communicate proactively. I have worked with many investors throughout the years, and this has been important to all of them. I struggled with this in the beginning of my career; I was good at communicating with my money lender when buying a house, but, once the project started, my communication would break down. I was so focused on the rehab and I felt like I didn’t need to bother the investor unless something went wrong. Instead, you should be communicating with your investor to let them know that everything is going well too. At least once a week, give them a summary of how things are going. It’s a good idea to have a conversation at the beginning of the project to find out what their expectations and preferences are in terms of communication. Make sure you’re communicating to the level that they expect.
- Always do what you said you will do. This may seem obvious, but it’s not for everyone. If you tell your money lender that you’ll communicate with them once a week, do that rain or shine. If you give them a timeline for something, stick to it. It builds trust and confidence in you as a person.
- Make them money! What private investors want from you as an investor is to make them money. It’s simple. That’s why they’re giving you money; not because they like you, but because they expect a profit, and they expect the profit you projected. And if you think you might not make the profit they expect, communicate that consistently and proactively. Don’t blindside them with bad news.
At the end of the day, if you want a long-term, mutually beneficial partnership with a money lender, make them money!