What Questions Should I Ask My Private Lender?

We got an email recently with a great question from one of our subscribers, from Charlotte, NC. Check it out…

“Hey Pat, I know that when I meet with a private lender that they’ll probably have lots of questions but are there any questions that I should ask them? I have my first private money appointment coming up next week.
Thanks for the help.”

I love that you’re focusing on what to ask your private lender, rather than just what to say. In Stephen Covey’s classic, 7 Habits of Highly Effective People, habit #5 is “Seek first to understand, then to be understood.”   To first understand, ask good questions to your private money prospects- questions that elicit motivation, questions that uncover needs and goals.

Here are 5 questions to ask prospects (make sure to write down everything a prospect tells you when you’re going through
these questions… this is valuable info!)

1) What experience do you have investing?
Find out if they’ve invested in CDs, mutual funds, bonds, stocks, real estate, gold. This will help you get a good picture of the type of investor you’re dealing with, their expectations, how knowledgeable they are with investments, etc.

2) Are you happy with the returns you’re earning on your investments (or investment portfolio)? Whether they are happy with it or not, ask the same question next,“What average rate of return have you been getting from your investments?”

Let’s say the prospect said he or she was earning a 6% return on x-investment. At the end of your presentation, say something like, “Well, I’m not sure if we can do this but…what if we could offer you a 8% annualized return backed by real estate… Would that be something that might work for you?”

3) Whether or not our program is a fit, would you like to find the right investment opportunity soon? If they say “no,” this may be a good person to add to your follow up list. You could also respond with something like this, “So if the money you have in x-investment stayed there earning x% for say another 12 to 24 months, you would be fine with that?”

4) Are you more interested in making a quick buck or building wealth? This is another way of asking if the prospect is interested in a short or long-term investment.

The private money that provides the most flexibility to you is long-term money. So by saying “quick buck,” we’re putting a negative connotation around investing short-term… and guiding them towards a longer term.

5) When you find the right investment opportunity, what range of funds could you invest? This is a POWERFUL question. You’re saying “when” not “if” they find the right investment. This assumptive language gets people to imagine finding the right investment opportunity – a very good mindset for your prospect to be in!

And by using the range technique, you have a much better chance at getting the info you want… because it’s much harder for someone to give you a specific number, than a range.


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