Real estate investors who regularly buy and renovate residential real estate often seek the services of a private lender. In fact, if the investor concentrates on such properties a private investor is used much more often a regular bank. Private investing has become much more common lately as the world ofwhat private investors want real estate investing has grown. The abundance of distressed properties called out for more private funding and individual investors answered. If you’ve never used a private investor, what can you expect?

The investor wants to know what you’re buying, what you’re going to do with the property and what will be the final exit strategy to pay back the note?

It’s pretty simple at its face and it really is but it all relates to providing a map that clearly shows where you are and where you’ll end up. The project should be able to speak for itself and there really should be no “sales pitch” necessary. If you have to make the hard sell, the investor is either skeptical or doesn’t understand the presentation. The more complicated the property the more it will take to explain. For example, a 150 unit apartment building with a poor cap rate that doesn’t need very much in terms of repairs but is the result of unhappy tenants and poor management. How do you explain that to an investor? How do you impart the reason the rents are so low is because of a mean manager? If you don’t know the answer to that your presentation isn’t clear enough. Whatever you think the objection might be, have the objection addressed in the proposal.

Private investors want good deals and if the investor feels there is relatively little risk, you’ve got a deal.