Take it from somebody who has gone from zero to $2,000,000 in 18 months – these sources is as solid and fails proof as it gets. One of the thing that has always bothered me in reading courses about real estate is much of the information seems like it is experimental – you know “if it sounds good on paper, may be it will work in real world”.

I know I should have written a warning on this blog when I first started that some people will be taken by my harsh tone on what works and what does not works in “real world real estate”. But I figured that after reading couple of posts, if somebody still does not gets it – chances are they are going to ignore the warning anyway.

But that is an entirely different post into itself. So let’s talk about the best sources of making private investors run after your money.

Private money works in phases. Unless you have rich parents / uncles who have nothing to do with their money and they just want to cut you a check, you will have to lay the ground work for getting the check from somebody who is most likely be a stranger.

But before we tremble in fear and anticipation – let me tell you a very smart way to turn that cold call into a warm embrace of a solid referral.

Source #1 for Private Money: Your Lawyer and CPA – I have never asked either my lawyer or my CPA for money yet they were the initial catalyst in starting my private bank. What I did was instead of asking them for referrals which I knew would make them a little nervous initially, after all it is a big thing to give somebody a referral for lending money to a third party – even when the money is secured by real estate.

Instead of coming out and point blank asking them to refer me to their clients with excess cash, I prepared a simple 10 page Instant Investor Credibility Kit – it contained pictures (both before and after the renovation) of several houses that I have done recently, purchase checks and also the checks from the sales of these houses) and printouts from my QuickBooks accounting software to show exactly how much I have spent and where it went. The whole thing took me may be 30 minutes to put together.

Then I wrote a letter on top of it, explaining who I was, why I needed private money and what were the rates I would pay private investors, when they will get paid, how would their investment would be secured and so forth.

At that time I picked up the phone and called my lawyer and my CPA and told them that was sending this package to some people who have contacted me via the website (which was not completely untrue, I was getting leads from people coming from my website, I just did not knew how serious they were) and I want them to take a look at the proposal and make sure that I am not saying anything wrong there.

Off course, since both to them bill every time they do something for me – they were happy to review the package. I emailed them the package, both of them called me the next day and told me that they have reviewed the package; everything looked fine and by the way am I interested in meeting couple of their clients who want to get these kinds of returns.

Which was exactly I was hoping would happen in the first place.

This is why I talk so much about relationships and why it is so important to have key people in your real estate business that would help you grow your business really fast.
You want to have these people in your business and you want to learn how to effectively leverage your contacts to help you grow your real estate investment business.

Next: How to use classified ads / website to attract private money.