Why Private Money is so important to your real estate business

By Gregg Cohen

For the first couple years in business, my team didn’t really focus on raising private money. We were so focused on our marketing and finding good deals (and staying alive as the market took a dive ) that we didn’t really grasp what private money lenders could do for our business.

So at our business planning meeting in Jan. 2009, we laid out our goals for the upcoming year. The number for 2009 was 50 deals….that’s what we we’re going to achieve. “Okay,” we said to ourselves, “now that that’s set, how the heck are we going to accomplish that?” You see, we had never done more than 28 deals in one year before, and we were basically going to have to double that. Not exactly a small task, huh?

From 2009 - 2010, our team will be doubling the number of deals we do because we started focusing on raising private money!

We knew we were going to need to make a drastic change to achieve our goal of 50 deals. And then it hit us like a ton of bricks….if we can raise private money then we can do more deals at the same time. No more waiting for one deal to close to do another deal. The more money we can raise, the more deals we can do, and the greater chance we have of reaching our goals!

So if you have been hesitant to really get out there and raise private money for your real estate business, let me tell you that is probably stunting your growth. If you don’t have plans to do 50 deals a year, that’s okay….but you still should be focusing on raising private money. It will increase your speed, increase your profits and you will build lifelong relationships through private lending.

In my next blog post, I’ll tell you how we’ve raised just about $3 million in private money just in 2009 and where we find our private lenders…so stay tuned!