Private
Lending Topic - I have received a number
of email questions recently on very similar issues and thought I would
address
them as a group versus individual emails. The questions are broken down
into
general areas and include things to do and things not to do. The Don'ts
include
advertising on Craig's List and the use of the word "Guarantee". The
Do's include what are the best marketing methods. My comments on each
are
below....
Don'ts
Private
Lending Advertising on Craig List - I do
not recommend that you advertise on Craig List. It is too public and
there are
state and federal watchdogs looking for people who may be violating
securities
rules. I have said on many occasions that I do not recommend any
advertising
that is on a national scale including your own web site. This kind of
advertising will get you into trouble with securities regulators and
may be
considered a securities offering to the public.
I
know this from personal experience. Several
years ago a person responded to my Craig's List ad requesting
information about
my investment program. After several emails, the individual said he was
ready
to invest and I directed him to my title company to prepare the
appropriate
documents. Strangely, I never heard from the individual again after
that.
A
short time later, I received a "cease and
desist" letter from the Pennsylvania Securities and Exchange. The
letter
had several direct quotes from the emails I had exchanged with this
individual.
The State did not fine me, but asked that I never advertise on Craig's
List or
on my web site. Needless to say, I am complying.
Private
Lending Guarantee - Do not use the word
"guarantee" in any form in any of your advertising. Do not use the
word "guarantee" or ever imply that somehow your investments are
"guaranteed". This is a sure fire way of attracting the attention of
the wrong people. You may say your investments are secured by real
estate,
which is accurate, but do not use the word guaranteed.
Do's
For
Private Lending contacts you should schedule
at least one breakfast meeting per week - This simple advice might be
the best
and almost certain way to attract large amounts of capital. Schedule a
breakfast meeting every week with someone who has extra cash available
and is
interested in your lending program. You will not get everyone to
invest, but
the chances are you will get enough to support a reasonable real estate
buying
business. At these meetings, be sure to ask the person for the name of
at least
one other person they know who might be interested in your programs.
Hand out 5 to 10 business
cards per week -
Again, this simple but very powerful advice will ensure that you have
plenty of
people on your prospect list. These are the people you have breakfast
meetings
or schedule a group meeting with. Everyone you come in contact with may
be a
potential lender. Do not overlook people just because they do not fit
the
perfect profile. You would be shocked that people that you would never
think of
as investors may become one of your best clients.
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