Private Money Partnering

Evaluating The Money Momma/Money Man

Chapter H (continued)

Evaluate As A Business Partner
Evaluate At Year-End

Forms:
Application For Investment
Earnest Money Agreement
The Risk Quiz

Evaluate As A business Partner

What are you looking for in money investors? What do you want from them? What do you want them to do be like? What are they supposed to have? What’s important in your evaluation of them?

√ Money
√ Ready Cash
√ Certain Cash
√ Extra Cash
√ Capacity for Multiple Deals
√ An Understanding of the Risk and Reward Issues
√ Business Sense
√ Accessibility
√ Staying Power
√ Friends with Money
√ Honesty
√ Comfort Level
√ Relief Capacity

Money

How much do they really have?

Ready Cash

How ready is ready? How much can they write a check for right now? Here’s a real situation that happened to me. I found out about a deal one late Thursday afternoon. I called one partner and said,” I'll need $52,000 and we need to close by next Monday noon. The house is worth $82,000. can you do it ?” so you need to know how fast how much cash is available.

Certain Cash

What does that mean? What’s nervous money? It backs out of a deal, or it’s committed elsewhere, or it’s short term, or it’s giving you a headache every minute because it’s so afraid. Should somebody be investing with what they need to live on? No, that makes it real nervous. When you do you projections on a deal you'll need to know how much money you'll need to you’re not crippling a private investing party.

Extra Cash

You need somebody who has the capacity for extra if needed. Does that happen often? Yes, in the real world.

Capacity For Multiple Deals

You want too see somebody who has the capacity for multiple deals, not Just a one-time relationship. When you have built a rapport, and a Relationship, you want to leverage the time you've invested. So, “How often can we do a deal together?”

An Understanding Of The Risk And Reward Issues

Do they understand that taking risk is part of the process?

Evaluating The Money Man / Money Momma - Chapter H (continued)