In my last article, I explained that you need to write a business plan, your prospect list of everyone you know, and a pitch letter. Now that you have those three things done, there’s just one last preliminary step to take, but it’s a big one. It’s time to prepare your elevator speech.

You may be wondering what an elevator speech is? Not to worry- it’s just what it sounds like. Let’s say you are riding in an elevator with someone you’ve never met, and she asks what business you’re in. the elevator speech is your response, which should sound like you just made it up on the spot, but in reality be well-thought-out in advance.

Keep in mind, your answer should be related to investing and private lending, not your day job, whatever that may be. Here’s an example of an elevator speech: “I’m a residential real estate investor specializing in commodity single family homes and duplexes. I use a small, select group of individual lenders to fund my deals, and they commonly realize returns on their investment of 12-15 percent. I currently have an opening for one more lender, and if you have any interest, I would like to share the details with you.”

That’s great stuff, eh? You can see why you need to sit down right now, today, and write your own elevator speech, can’t you? Use your previously written pitch letter and business plan as templates. All you need is between two and five finely polished sentences. Then, memorize them and practice them so you can say it without sounding stilted.

Now that you have finished writing your foundational materials, the time has come to start getting in touch with the people on your list. Call, write, or email… it doesn’t matter how you contact them, but once you reach them let them know the purpose of the contact, and that you have a proposal for them. Explain private lending in simple terms, and ask if they would like to consider being a private lender for your real estate investments. Tell them you wouldn’t mind answering all their questions one on one, and be sure to emphasize what’s in it for them (the benefits)!

Another way you can go about this is to schedule a meeting room at someplace like a restaurant, hotel, or library and hold an informational meeting. When you reach the people on your list, invite them to the meeting where all their questions will be answered. You will have at least a few of them say yes, and then you’re off and running!

When I write my next article in this series, I’ll provide details on how to create and develop a top-notch informational meeting, and get yourself a boatload of private money lenders. Stay tuned!

Initially, you will start by sitting yourself down in a comfortable place and writing out your investment plan. No, I don’t mean you need to pound out thirty pages, but just a short, specific, on-point business plan that will let prospective lenders know you and your business. How do you plan to invest? What types of properties? Will you buy and hold or flip? How will you profit? What kinds of discounts will you realize? Think like a potential investor and answer their questions before they ask them.

Don’t rush through this step. All the time you take here will be paid back later with results. This plan is going to become the basis for two later steps – your elevator speech and your seminar presentation – which I will write about in a later article. Make sure you cover specifics, but don’t be overly long. Think about your future lender as you write your plan, and write to that person. Include specific details about real estate transactions you may have already done, if any. If not, estimate, but don’t exaggerate.

The next step is to create your potential private lenders list by writing down the name of each and every person you know. You’ll make no judgments about worth or lending ability, just follow one simple rule- if you know them, their name goes on your list, whether you have known them for one day or thirty years. If a name pops into your head, write it down, and get help remembering who you know from friends and family. Work towards the most complete, extensive list possible.

You don’t want or need to hurry this step. Slow down and get a good start on the list, then set it aside for a couple of days to let your subconscious go to work. When you pick it up again, you will be astonished at how many new names you’ve remembered. Lastly, keep the list with you constantly for a few days, and put any name you think of down immediately.

Once you have what you believe is a complete list, start adding contact data such as email, street address, and telephone #. The goal is to have at least one way to contact each individual on your list, and you want to make sure the data you have is good and current. Once you start getting in touch with these people, you won’t want to stop to get addresses and such. You’ll be too excited! A little extra time spent here sets you up for massive success later!

OK, last step. Using your business plan as a template, write a letter to your list of possible lenders, telling them what you are doing, how you are doing it, and what you are looking for. Lay it all out for them, and be straightforward. Ask them to think about becoming one of your private lenders. Most important of all, tell them clearly why they should want to do it. In other words, what are the benefits? What’s in it for them?

Some might be scared of this step, but you won’t be! All the preparation you’ve done up til now will give you confidence to carry through to the finish line. Go for it, and write the best letter you possibly can, no matter how many re-writes it takes. this letter is going to be the cornerstone of the future work you do to build a stable of private money sources, eager to stuff cash in your pockets for real estate deals. In your letter, add at least five benefits for the lender to participate, and make them pop! Now that your letter is finished, you are prepared to move on to the next step of finding actual lenders for your private money lender loans program.

Simply stated, partnership investing helps you “fill in the blanks” in your investing knowledge and experience. What do I mean by that?

Easy… let’s say you have a good credit rating , but not much cash. Then find an investor to partner with who has cash but not much credit. Maybe you have experience as a landlord, but little knowledge of property values. You should look for a partner-investor who knows values but is lacking in landlording experience.

I could go on, but you get the idea. Whatever you’re lacking in your investing experience or toolbox, make up for it in your investor-partner. Investing partnerships based on “filling in the blanks” can be more profitable – and more fun – than investing alone.

For a socially responsible way to invest, without going it alone, try Cash Free Real Estate Investing.

First, a definition. Short sale real estate investing is simply buying a piece of property from a lender for less than the balance owed on the property. To make this really clear, here’s an example:

Example Of A Short Sale

Let’s say that you get a phone call from Mr. Seller, who informs you he is three months behind on his mortgage payments to Big Bank. The property has a fair market value of $150,000, and Mr. Seller has a mortgage balance of $140,000. The home is either already in foreclosure, or very nearly so. Short sale real estate investing in this case means that you, negotiating with Big Bank, would purchase the property for less than the mortgage balance of $140,000- often much less.

Why would Big Bank do this? Simple- because in many cases, the lender stands to lose a whole lot of money if they have to foreclose on a property. The lesser of two evils is to accept your “short sale real estate investing” offer for, say $120,000.

Two Types Of Short Sale

There are two categories of short sale real estate investing. First, there’s the short sale you negotiate directly with the lender, as in the example above. The second type of short sale real estate investing is when you purchase a property listed with a Realtor, one which the lender has already foreclosed on and taken possession of. In this case, you are simply offering the lender – which has now become the owner of record – less than what was owed on the property.

The secret to being successful with this second type of short sale real estate investing is in forging a relationship with the right local Realtor. Rest assured, there are one or two Realty offices in your area that handle the majority of foreclosures, and in those offices there is often one or two agents that specialize in foreclosures and short sale real estate investing. Find those agents, and you have located a potential gravy train.

The key in building your relationship with these Realtors is to let them know that you can perform, in other words that you will do exactly what you say you will do in short sale real estate investing. When you make an offer, follow through on it every time. When you do that, the agent will know that you are the investor to turn to whenever he has a short sale real estate investing deal that’s too good to pass up. He’ll call you first!

For the other category of short sale real estate investing, where you are negotiating directly with the lender, there is also a secret key. I call it “relentlessness” and it’s what separates the pretenders from the successful short sale real estate investors. It’s the ability to dig until you find the right person at the lender to speak with, and then tenaciously negotiating until the lender either accepts your offer or tells you to pound salt.

How To ‘Take Down’ A Short Sale Deal

Let me walk you through an example of short sale real estate investing. We’ll start with the same scenario from above. Mr. Seller’s lender Big Bank has a foreclosure department, often known as the REO (Real Estate Owned) Department, so you start by phoning there. After several attempts, you finally get through to Mr. Admin, who informs you that, sorry, no, Big Bank doesn’t accept short sale offers from investors. Oh, well, you think, so much for your first short sale real estate investing effort.

Not so fast. In the spirit of being truly relentless you decide to try a back door approach. Remembering that the friend of a friend is the secretary to the executive vice president of Big Bank, you make a few more phone calls, and finally reach Mr. VP. He informs you that Mr. Admin can’t make any decisions, and you really need to be talking to Mrs. Powerful, who can. Now we’re getting somewhere.

In a roundabout way, you have just gotten the only person in the Big Bank corporate structure with the real power to make deals, and that’s what makes short sale real estate investing work. Not every lender will have such a person, but some will, and those will be the lenders you can work with. Over time you will get to know who you can work with, and who you can’t.

One thing is certain- you will never know until you try. Once you’ve located and negotiated with a few Mrs. Powerful’s, you will begin to develop procedures and tactics for short sale real estate investing that will work for you, time and time again. That’s the way every successful business works, and short sale real estate investing is no different.

These are the simple keys to successful short sale real estate investing. Get to know the best foreclosure Realtors in your area, be the type of investor who follows through, be relentless, and learn as you go.

There is a company called City Capital Corporation that has developed a program that allows investors just like you to invest in property in urban areas, using the funds in their self-directed IRA or their good credit.

Since City Capital is looking for both IRA investors AND credit investors, their program is a good fit for almost everybody. Ephren Taylor, CEO of City Capital, has a passion for rebuilding urban neighborhoods, and providing safe, affordable housing for working class families.

There is most likely a role you can play… and quite a profitable role at that. At the very least you owe it to yourself to get the facts. Visit Socially Responsible Real Estate Investing, and sign up for the free webinar. Just for attending, you’ll receive a FREE copy of Taylor’s book, “Creating Success From The inside out,” a hardbound volume detailing Taylor’s own motivational and encouraging story.

If you would like to learn how you can invest in real estate in a socially conscious way, with none of the hassles or risks of traditional investing methods, and keep the profits for yourself, check out Socially Conscious Investing right now!

A couple of points at the outset are important to understand. First, no cash doesn’t necessarily mean no cash from any source. Rather, it means no cash of YOUR OWN. That’s an important distinction.

Second, what we’re really talking about here is also known as “no-money-down” investing, a topic which has received lots of attention, and had lots of books and articles written about it. That’s the reason it’s a real estate investing FAQ. I’m not going to try to cover it in detail here… just give you the broad brush strokes.

To answer the question, of course there is such a thing as cash free real estate investing – but it’s not as common or as easy as the gurus would have you believe.

First of all, investing with no cash of your own requires something other than cash, such as equity, or credit, or some other kind of leverage. Other people’s money, be it bank, partner, or third party, typically doesn’t make itself available until there is a darn good reason, like a smoking deal (equity), someone willing to hold paper (credit), or a combination of these and other “leverage” tools.

Think about that word “leverage” for a moment. It comes from the root word “lever,” which is a small tool used to move a great weight. That’s what real estate investing leverage does, controlling big, expensive properties with a loan or mortgage, by using the principles of high equity and good credit.

So you see, you can buy properties with little or no cash, as long as you have some tool for leveraging. If you find a great deal, that’s leverage. If you have excellent credit, that’s leverage too. And, if you have a boatload of cash available, you may not need to use it because just having it can act like a lever as well.

Partners and other entities can provide cash in certain situations, and often they are the best form of leverage for cash free real estate investing. A company like City Capital Corporation, and their Socially Responsible Real Estate Investing Program, can provide a risk-free, hassle-free, cash-free vehicle to leverage multiple real estate deals, and best of all you keep all the profit.

We’ve looked at just a few cash free real estate investing alternatives, and admittedly we’ve only scratched the surface. Stay tuned for more real estate investing FAQ.

First, the real estate investing FAQ I hear more than any other is, “How can I get started in real estate investing?” By itself, this wouldn’t be such a tough question, but it usually comes attached to a second – but no less important – question… “With little or no cash or credit?”

Ah, there lies the real problem. For somebody with a good supply of cash, credit, or both, real estate investing is not all that tough to get started in. But once you throw in the combined difficulties of zero cash and a poor credit rating, things become measurably more difficult. So, here’s the answer I usually give to a would-be investor asking this real estate investing FAQ.

First, I tell them to be encouraged, because thousands of investors have gotten started without cash or credit.

Second, I advise them to find and join their local Real Estate Investing Club or Organization. Most major metro areas have one, and even if you have to travel to get there, it’s well worth your time and effort. In most areas, this will be a REIA group (Real Estate Investing Association) and you can probably find them on the internet with a little diligent searching.

Failing that, start by talking to several of the local Realtors in town, and try to find one who works extensively with investors. Once you find that realtor, he or she will be able to tell you where the local investor’s club meets. Go to a meeting and start talking to other investors.

If you live in a small town or rural area where there is just no club, you will need to be a little more pro-active. Start your own group. Let your new Realtor friend know you would like to do this, and ask him or her to help you. You only need a handful of investors to get a group started, and it first, it can be a very informal set-up. Just pick a place to meet, let people know by word of mouth, and start. Take action, and you’ll be amazed at what happens!

At the meeting, meet as many investors as you can. As a rule, we’re a pretty friendly bunch, and you’ll soon find somebody you can talk to, who has some experience you can learn from. What you’re looking to do is form a loose partnership with this person, and often the best way to do that is to offer to help them find properties, called bird-dogging. Basically, you will locate properties for them and they will pay you a fee for doing so.

This is a great way to break into real estate investing, get some valuable experience, and build your reserves of cash for your own future investing. Don’t worry, your new investor friend will tell you what to look for, and where they like to buy. If they don’t share information, find a different investor to work with. After all, this is your education we’re talking about.

I can’t emphasize this enough… there really is no substitute for finding other investors to build relationships with, work with, and learn from. If your real estate investing FAQ is “How do I get started in real estate investing… with little or no cash or credit?” you need to get connected to the active investors in your area FIRST.

Hopefully, I’ve given you a good first step. If you don’t act on it, it will be worthless to you. Remember though, it’s only the first step. There are others, and future articles in this series will cover other real estate investing FAQ.

Here’s my list, which I will add to as time goes on:

• How do I get started with no cash or credit?
• How do I fund my deals?
• What’s the best education in real estate investing?
• What are the best investment properties for beginners?
• Is there a good real estate investment guide?
• What’s the best REIT to invest in?
• How can I engage in socially responsible real estate investing?
• Where can I find private money for real estate investing?
• Is there cash free real estate investing?

Even though there are a lot more questions, these are the ones I hear most often. Visit the links to get more information, and I will update this page as I add more answers to this site. Stop back often!