236 – Top Three Things You Must Do to Keep Your Private Money Lender Happy

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.

  1. 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.
  2. 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.
  3. 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!

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2 Comments

  1. Joseph Bosco on 09/22/2016 at 3:13 PM

    I want to learn how to wholesale properties in California. I’m 22, in 30k of debt, I live alone and have a a lot of bills piling up. You can say i’m on a time constraint. I don’t want to pay for these bullshit webinars, I’ve seen enough of them. I want a real person to contact me and “hand hold” me through the process. Why aren’t there any people who give their time and knowledge to the youth who ACTUALLY have a background in real estate and contracting, and a TRULY passionate in this industry but unfortunate to be born into a poor family.

    • Mike Simmons on 12/21/2016 at 6:13 PM

      Joseph, I read your message. I apologize for taking so long. I have been away from my podcast for a while building my business. You’re in a tough position. You say that you want to learn how to wholesale properties but have no money. It can be done but it’s very difficult without any way of marketing for leads. What people don’t tell beginners about wholesaling is that although you don’t need money to buy properties, you really do need money for postcards, paper click ads, bandit signs, etc. in order to drive leads into your system. There are free and inexpensive ways Drive leads, but they are less successful and take a lot of time. In regard to your question about why experienced successful real estate investors won’t contact you and hand hold you through the process – I would say the most simple answer is because successful business people know that the only real thing they have a limited amount of is time. It’s difficult to have someone reach out to you and “hand hold you” through the entire process because there simply isn’t enough time in the day to do this for everyone who requests it.
      The good news is the answers to any issues or questions you have regarding real estate investing is out there for free on the Internet/podcasts/books. I wish you all the luck in the world, and if you have any questions I would be happy to shoot some quick answers to you, but as far as taking your business by the hand and leading you down the path, it simply isn’t possible at this time.

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