How to Get Predisposed Private Money for Multifamily Apartment Investing

Real estate entrepreneurs may desire to get out from their jobs and enter the world of real estate investing using their own money. But it won't work. Ask any successful multifamily apartment investor, someone who has been in the industry for a while, and they will tell you otherwise. If you want longevity in this game you need to be able to raise capital from investors.

It's not that you can't use your own money, but you will run out. And what's more, it's much easier to be successful in business when you leverage the strengths of more than one person - like the principle of "1 + 1 = 3". So, you need to stop thinking of using your own cash for your real estate entrepreneur efforts because you'll never achieve financial freedom that way. Then, you need to embrace the idea that acquiring investors' private money is a key skill and you'll multiply your likelihood of success.

In this article, I'm not going to talk about finding private money for multifamily apartment investing. I talk about that in other articles, and will continue to talk about. Instead, I want to talk about what happens when you're face to face with a potential investor. What do you say?

In some ways, what you say and what you do comes back to the fundamentals, to "sales 101". But don't let that scare you off. While you are selling, to a certain degree, I want to resist using that terminology because of the negative connotations associated with it. But even if we call it something else, the ideas are similar. So here are two tips to help you when speaking to potential real estate investors:

Look for motivated people. In a sales situation, the person who has the need is the one with less control. If you're buying a pair of shoes because you desperately need them, the shoe salesperson knows that and has the control in the negotiation. But if you don't need the shoes, and simply want them, the salesperson is the one with the need (to make a sale) and you have control.

Therefore, look for potential multifamily apartment investors who need to invest their money. Perhaps they desire financial freedom but don't have the know-how or time, nor have the desire to put their money into the stock market. Rather than going to them hat in hand with a begging look on your face, approach them with the confidence that you are able to solve their problem with your opportunity. Don't be afraid to walk away from the deal and you will transform your search for private money.

Keep their return in mind. It's easy to talk about what you want to get out of a deal. However, doing that won't be successful. Instead, rephrase the idea but keep their potential return at the forefront of the conversation.

For example, someone might say to an investor "I want to use your money to make money and achieve financial freedom for myself." Remember that the potential investor will always be thinking "what's in it for me?" So keep that in mind when speaking to them. Consider saying something like "With your investment of money and my investment of time, we can both benefit from this deal together".

Predisposition means that they have a vested interest in seeing you become successful. That might come from their need to earn more money on their invested money than they were earning from the stock market. Or, it might come from a share in the equity of the real estate opportunity itself. Whatever the case, these investors are the best kind to get because they will succeed when you succeed, so they're far more motivated to see you succeed!

When you find motivated people and you present them your real estate investment opportunity while keeping their return in mind, you'll get predisposed investors who want to help you succeed. They will be motivated to lend you money so you can leverage your investment into a profitable one. Motivated investors are the best kind to have because they can keep you on track, and they might even be able to participate in some aspect of the investment. Just keep asking yourself: What's in it for them?