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Why Private Lenders Back Out… And What To Do About It

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No U-turns!

Keep the deal moving forward!

If you’ve been getting private money to fund your real estate deals for long, you’ve probably had this unfortunate experience…

You get a commitment from someone to fund your deal. BUT between “commitment” and “close,” your prospective private lender talks to someone (a neighbor, a Realtor friend, colleague at work) who changes their mind. Negative comments are made and objections are raised about the investment opportunity that your prospect cannot answer…

… and your deal falls apart :-(

So, how do you prevent private lenders from backing out?

The best way I’ve found is to prepare your prospect for the naysayers and objections, BEFORE they come up.

After you get a verbal commitment, say something like…

“Oh yeah, one more thing I wanted to mention to you… investment opportunities like this are non-traditional… meaning that it’s not like investing in the stock market or a CD or mutual fund…

… so if you talk about your investment decision with a friend or family member, they may tell you “it’s risky” or “that’s not a good idea” or “it’s not a good time to invest in real estate”… but that’s because they obviously don’t understand everything that you do now… now that you fully understand and are comfortable moving forward investing in a property with us.

They may even ask you questions about the investment that you don’t know how to answer exactly… since you haven’t memorized everything we’ve gone over here.

Just wanted to prepare you for what “other people” may say. You are comfortable and confident in your decision to move forward, right?”

Now, you’ve prepared your private lender for what’s to come… if someone says something negative or asks a question they cannot answer… everything is ok because they expected it to happen.

Instead of your deal falling apart, it’s smooth sailing “commitment” to “close.”

If you have any questions, toss ‘em in the comment area.

Happy Investing!

- Patrick Riddle

Click here to read the script Patrick uses to get Private Money.

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