Over the last ten years I’ve bought and fixed and sold over seven hundred properties and invested my own money maybe in five or six of those properties. Other than that, almost every deal that I’ve ever done using private money and private equity from other people, were based on referrals.
I’ve come up with a list of at least 100 different places, people, referral sources, groups, etc. that you can raise private money from. The whole idea of building a business based on referrals is that I want to be the top of mind reference when people think of real estate. When anybody is looking to buy a house or sell a house, I want them to think of me.
Your “Project 100”
Here is a list 100 sources you could potentially recruit private money from:
- Aunts and Uncles
- Spouse’s family
- In-laws of family
- Extended family, or people that you consider family
- Best friends
- Spouse’s best friends
- Very close friends
- Spouse’s very close friends.
- Children’s friends (If they are of age.)
- Parent’s friends
- Children’s friend’s parents
- Kid’s teachers
- Former teachers
- Children’s coaches
- Former coaches as you were growing up.
- Kid’s school principal
- Your former school principal
- Your former classmates or military friends
- Kid’s Dentist or Doctor
- Kid’s school bus driver
- Your Hairdresser/Barber
- Salesmen that sold you your car
- Car cleaner/detailers
- Your mailman/woman
- Your UPS/FedEx delivery person
- Your church community
- Your local convenient store owners/employees
- Your priest, minister, bishop, or rabbi
- Bank tellers
- The people who manage your loans at the bank
- Stockbroker/Financial Planner
- Pet groomers/sitters
- The owner/waiters of your favorite restaurant
- The owner/bar tenders of your favorite bar or nightclub
- People you meet at your local country club
- Golf buddies
- Ski buddies
- Shooting Range buddies
- Basketball/Racquetball/Tennis/Sports buddies
- Health club/Rec center people
- Parents at children’s sporting events/concerts
- Heating/cooling service technician
- Pest Control person
- Insurance agent
- Your tailor/seamstress/dress maker
- Computer repair guy
- Grocery/Market clerks
- Police Officers
- City Officials/Politicians
- Former business associates
- Local clubs – Lions Club, Kiwanis, VFWs
- Social Organizations
- Industry Groups
- People you invited to your wedding
- Your leisure equipment salespeople (Boat, Motorcycle, Bicycle, Motorhome, etc.)
- Electronics salespeople
- Co-workers from previous jobs
- Previous neighbors
- People in your Homeowners Association
- Suppliers from your workplace
- Anyone trying to sell you something (Multi-level Marketing)
- Safety/Security Rep
- Cleaning people
- Water Delivery guy
- Bowling buddies
- Poker buddies
- Bar buddies
- Cell phone rep/salesperson
- People in your Business networking group
- Local real estate meet-ups
- Real estate agent
- Chamber of commerce members
- Gas station attendant
- Fitness Instructor
- Baby sitter
- Massage Therapist
- Massage Therapist
- Architect/Interior decorator
“But, I don’t know anyone who has any money?”
I want to give you a little warning: Don’t make a judgment call on who these people are or where or how they can do business with you. Let me tell you a story:
15 years ago I was about 25 years old. I was making six figures years as a financial adviser, and I had an appointment on the east side on the far east side of Cleveland. So I drove an hour and got off the freeway, and was in the middle of the sticks. I was in the middle of nowhere. I pulled up into a gravel driveway and pulled up to a mobile home. The outside of the mobile home was as dirty as could be. I was disappointed I wasted my time and drove all the way out of this house.
I thought: “Hey, I’m here…I might as well go inside.”
They invited me in and I said hello. I looked around and in the kitchen saying there was a mound of dishes that had to be there for over a week. I was afraid to touch anything, it was so dirty.
So, I started talking to this older couple and I found out more about their finances and where they were at. I found out they were nearly millionaires. He had worked for GM and then saved tons of money in his pension and 401k. She was a schoolteacher and had saved hundreds of thousands of dollars and also had a pension from her job as a teacher. They had saved money and paid off their house and all their land!
I made a judgment call and almost didn’t go into that house…
I’ve learned to never make a judgment call about the way somebody looks or how they act. Everybody has the same goal: To save money and invest it wisely.
All of these different people want to be in real estate. Everybody wants to own rental properties and get free cash flow from rentals. Everybody wants to flip a house. Everybody wants to do it, but they just don’t have time for it. Everyone knows that real estate is a good investment.
So don’t make a judgment call of who they are or what they do. Everybody out there wants to be involved in real estate, so put them on your “Project 100” List.
Make a list of everyone: They can refer you deals, they can cheerlead for you, they can lend to you, they can make investments with you, they can buy a house or sell a house to you. Make sure they know who you are and what you do and become the top of mind reference so that they can be part of your world and eventually help raise money and lend money to you on your deals.
I’ve built a multimillion dollar business doing just this. Don’t tell me it doesn’t work, because I’ve already done it and I’ve already accomplished it.
So who do you know that you can talk to?