“Adam, what’s the one way to get private money?” a man once asked me. I thought about it for a minute. Then, I thought about it for another minute. And then another.

Until there was an uncomfortable silence in the room.

Soon the man who asked the question cleared his throat: “uh-hm…”. This pulled my attention from deep thought back over to him. During those few moments of silence, I reflected upon the private money I had raised (over seven figures, multiple times) and the deals I had done with private investors (hundreds) and I searched high and low the far reaches of my mind a good answer to his question.

And I came up blank.

But, I didn’t continue to sit in silence. Something d hit me. Like a ton of bricks. One of those flashes of lightening you get only when your brain is firing on all cylinders. And I want to share that with you today. Because the answer to this “burning question” is so valuable that it just might save you a couple months of weeping and teeth-knashing…

Here’s what I replied: “can you tell me the one way to get a great deal on an investment property?”

The man thought for a while, the audience’s attention shifting back and forth from him to me…and back again. Finally he said: “No. You could get a deal off of the MLS, from your own marketing, a website, newspaper ad, and other ways, I suppose.”

This was a good answer. Scratch that – it was a GREAT answer. And, entirely true. There was no ‘one magic way’ to get a great deal on an investment property. But, there were several proven techniques that made it all but impossible to not find a good deal by using them.

Here’s where it gets interesting: although many real estate investors will agree that there is more than one way to skin a cat when it comes to finding and selling properties, they seem to be pretty darn sure there is only one way to get private money. And, so they keep searching for that one way.

Which usually ends up in vain.

You see, getting private money relies on the same techniques and principles that you use to find good real estate deals. If somebody asked you where the good deals were in this market, you might tell them “everywhere! You could go here, there, insert place .

To find good deals, consistently, you need a solid, proven multi-step marketing plan.

It might look like this:

* Meet local real estate “players”

* Build relationship with buyers agents & listing agents

* Follow up continually and let these players know how working with you will be good for them

* Send postcards or letters to motivated sellers of properties identified from public record search or lead generation advertising

* Follow up consistently with direct marketing to sellers

* Set bandit signs out on weekends to generate leads to direct call #

* Etc.

What you would do if you wanted a continual flow of deals is you would implement a system that would cast as wide a net as possible. If you really wanted to eat and had the option of fishing with a bamboo pole, string, and worm versus a huge net that could drag the entire lake, which would you choose?

I hope you said the net. Because that’s what it takes to generate private money – so much private money that you won’t ever have to worry about how you’re going to close a deal ever again. You won’t have to worry about coming up with the equity to buy a large commercial building. There are a lot of ways to ‘blow it’ with private money

And, the first and biggest way you can blow it is to never give yourself the chance to raise any. If you rely solely on posting your deals up on internet websites and praying for a response; if you rely solely on talking to a few people at a networking group; if you rely solely on putting up a website (which probably doesn’t have the right response mechanisms in place); if you think Face book is your private money getting savior, well then… You’re gonna be very disappointed.

Maybe you’ll get lucky (hey, it’s better to be lucky then good sometimes). But, it will be tough to make this work for you on a consistent basis. It would be akin to opening up a pizza restaurant and then saying the only way that you were going to rely on getting customers is with radio advertising.

Not a good idea.

In your quest for the ‘one’ silver bullet solution to getting private money, you should really think about fishing with a net and maybe some dynamite instead of just a bamboo pole and a string.

Think of private money the same way you do real estate investment deals. I guarantee you’ll be pleased with the results.

-Happy Investing

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Adam Davis is a real estate investor, author and speaker. He teaches real estate investors how to raise capital. Adam has completed hundreds of deals- from single family house flips to apartment buildings. He has raised millions of dollars from private individuals. For a FREE audio program on how to get private money go to: http://foreclosureswithprivatemoney.com/

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Make Money Flipping Houses

Steps in Fixing and Flipping Houses

Who wants to be a Flipper?  Most people have seen the show flip this house and have seen a little bit of what goes into fixing up and flipping a house.  But Most people do not see all the little things that go into the process.  Fixing and flipping houses can provide huge profits for many individuals but you can also lose money if you do not do your home work and know what you are doing.

This article will show you the over view of the steps that goes into a successful rehabbing project.

Step one –Find the House

Before you can fix up and sell a property you need to find a house.  There are hundreds of different ways to market for sellers.  You can get a realtors to find you a fixer upper, you can put out signs saying you buy houses, put up classified ads, send out mailers, or drive around and look for ugly or vacant houses.

You will want to be careful and make sure that you buy the house right.  Here is a little formula for buying a fixer upper.  Take the After Repair Value of the house(ARV) x 70%   Then Subtract that Number from the repairs needed.

The Next Step is the Walk Through.  I like to Do this walk through before I close on the house, so that I know exactly what price I Need to Buy the house at.

Step Two – Walk Through the Property

You will need to set aside around an hour or more depending on the size of the house.  You will need a flash light, a note book, tape measure and a camera.

I First start in the living room, and list out everything I need to replace, Measure the Room size and note any damages you see.  I do this in every room.  You will also want to do a little more in the kitchen and bath room.  Check everything you can, make sure there is no leaks and what not.  Also measure the cabinets, Measure the counters.  Note if you are going to replace them or re finish them.

I also take pictures of each room.    If you are going to make any changes to the lay out of the house, make sure you have graph paper and draw the new layout you want.

Step Three – Put a Scope of Work Together and Material List

Next you will want to put together a scope of work and material list.  I like to create a scope of work for each different type of job, from electrical, plumbing, roofing, siding, interior.

To get a material list, if its your first time doing a project, take you scope of work to Lowes, or home depot and have someone help you.  Have them explain to you what everything is going to cost.

Step Four – Contractor Bids

Once you know what all your material is going to cost you can start getting contractors to bid on the property.   You Will to make sure you have a lock box on the property and leave 6 or so scopes of work at the house.  Call 3 or more contractors and tell them the job, tell them you have a scope of work at the house and give them the lock box code.  Also make sure you give them a dead line to get back to you, no more than a week.

Once you get all your bids back, pick the one that you feel will be the best, not the cheapest.  Pick the person who seems the most reasonable and who you think will do a good job.

Step Five – The Work Begins

This step is pretty simple.  All you are doing now is managing the contractor and making sure they are working on your project.   As a side note, never pay a contractor all the money up front.  Have a pay schedule make out and have them get paid when certain mile stones have been complete.

Step Six – Clean Up and Land Scaping

Your almost done now.  Now the work is done, the contractors are cleaning up the house.  You will want to make sure the house is spotless before you give them their final check.  Also this is the land scaping stage.  Where you trim trees, bushes, plant flower and whatever you want to do to make the outside look Great.

Step Seven – Marketing the house

Slap a for sale sign in the yard, market your house on every free classified site you can find online, or Get a realtor to sell your house for you.

Step Eight – Collect Your Check

If you house is priced right and looks amazing you should have a check in your hand in no time.

This was a quick over view of the rehabbing process.  There are other steps in there but I would have to write a book to ad them all.  Get out there and Start fixing and flipping houses.

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Filed under: Rehabbing Houses

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