Finding private money isn’t about luck — it’s about systems. The investors who consistently raise capital have a presentation, a script, and a follow-up process. They treat private lending as a marketing and sales function of their business, not an afterthought.

As Patrick Riddle puts it: “There are many beginning investors who get stopped in their tracks because they foolishly believe, ‘You’ve got to have money to make money.’ I am here to tell you that this is not so. I started without cash or credit and so can you!”

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Who Has Private Money?

Private lenders are everyday people with capital sitting in accounts earning minimal returns. They are not faceless banks — they are individuals looking for better returns.

Source	Why They Lend
Retirees	Need income; CDs and bonds pay too little
IRA Holders	Can lend through self-directed IRAs for tax-advantaged returns
Business Owners	Have capital reserves; want diversification beyond stocks
Friends & Family	Trust you; want to help and earn a return
Real Estate Agents	Understand the market; see your deals
Other Investors	Want to diversify into real estate without managing properties

Everyone can be a private lender using their IRA to lend you money for your business. This opens up a massive pool of potential capital.

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The Power of Private Money

Private money gives you flexibility that traditional financing cannot match:

• You set the terms: You decide the rate of return, time frame, and payment structure
• Speed: Contract a deal on Tuesday, close by Friday
• No red tape: No bank underwriting, no appraisals, no origination fees
• Asset-based: Loans based on the property, not on you as an individual
• Leverage: Having private investors on call gives you tremendous negotiating power

As Riddle explains: “You’re the boss when it comes to structuring an investment with a private lender.”

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The Presentation Approach

Riddle’s system centers on a 14-slide presentation delivered in about 45 minutes. The presentation walks a prospect through the market opportunity, your business model, sample deals, and next steps.

Presentation Structure

Slide	Topic
1	Your Company Name
2	Today’s Real Estate Investing Market
3	Opportunity Awaits the Intelligent Investor
4	Our Business Model
5	Why Borrow from People Like You
6	Before We Get Started
7-9	Investor Evaluation Questions
10	Investment Opportunity
11	Sample Deal
12-13	Common Questions
14	Next Steps

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The Most Powerful Sales Tip: Negative-Positive Language

Riddle calls this “the most powerful sales tip ever invented” — and it seems counterintuitive at first.

The principle: Your mind cannot process a negative. If you say “This isn’t a bad investment,” the prospect pictures “bad investment.” If you say “Don’t think about a pink elephant,” they can’t help but think of it.

Negative-Negative (Avoid)

“This isn’t a bad investment” → Prospect pictures “bad investment”

Positive (Common but Weaker)

“It’s a secure investment. It’s very safe.” → Prospect may picture it, but skepticism often replaces the image

Negative-Positive (Most Powerful)

“I’m not really sure if our program will be right for you…”

This accomplishes two things:

1. It gets the prospect picturing that your program is right for them (because the mind can’t process the negative)
2. It distinguishes you from all other salespeople — no one has ever said their product might not be right for them. The prospect thinks: “What makes him think it’s not right for me? I’ll be the judge of that!”

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Investor Evaluation Questions

Before presenting your opportunity, you need to understand your prospect’s goals and decision process. These questions do that.

• What experience do you have investing?
• Are you happy with your current investment portfolio?
• How do you think our program could help with your investment goals?
• Whether or not our program is a fit, is it important that you invest right now?
• Are you more interested in making a quick buck or building wealth?
• Is having a regular income from the investment important to you?
• What would the right investment provide for you?
• How do you go about making decisions to invest?
• If you found the right opportunity, when would you want to get started?
• Who is involved in the decision-making process when you invest?

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Sample Deal

The “Sample Deal” slide is one of the two slides you must customize for your business. Here’s Riddle’s example:

Item	Amount
Purchase Price (bank-owned)	$99,000
Private Investor Lent (purchase + renovation + holding)	$140,000
Appraised Value After Renovation	$210,000
Interest Earned at 10% for 6 Months	$7,000
Equity Created	$63,000

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Common Questions from Private Lenders

How is the real estate market affecting your business?

It’s a great time to buy. As long as each deal is structured so that we don’t have to sell a property, we will be in good shape.

Why would people sell their house at such a deep discount?

Job loss, divorce, bankruptcy, foreclosure. A lot of the time, money is not the most important thing to the motivated seller. Peace of mind is.

Would I be investing in a piece of property or your company?

You would be investing in a particular property.

Is the investment secured?

Yes, you are secured the same way a bank secures itself when they lend money.

What kind of paperwork do I get?

You get a note and a mortgage just like a bank. The note spells out the terms of the investment and the mortgage secures your investment on a specific piece of property.

Can I invest from my IRA?

Sometimes you can invest IRA funds. Self-directed IRAs allow alternative investments like real estate lending.

Can I use home equity or stock as collateral?

Yes, if someone wanted to, they could get an equity line or use stock as collateral and invest that money. They would just make the difference between what they pay in interest to borrow and what we pay.

What about taxes?

Interest income is treated like ordinary income. You only pay taxes on the interest income received in any year. If the investment accrued interest rather than having regular payments, you would not be taxed on those earnings until you actually received them.

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Next Steps: Defining the Investment

Once your prospect expresses interest, define these details:

Step	Details to Define
1. Define Investment Details	Amount investing, time frame, payment terms
2. Position Funds for Availability	Confirm when funds are accessible
3. Receive Investor Paperwork Package	Note and mortgage (or deed of trust)
4. Deliver Funds for Closing	Wire or check to closing attorney

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Action Plan to Recruit Your First Investor

1. Decide today to recruit private money for your real estate deals. Set a goal for signing up your first investor and for your first appointment.
2. Study the presentation. Find a partner to learn it with. Role play until you’ve got it down. If you don’t have a partner, say it out loud to yourself.
3. Fail forward. You only fail at something when you quit trying. Get started, ready or not. Set your first appointment and do the best you can.

As Riddle asks: “Am I willing to do whatever it takes? Am I willing to be uncomfortable? Am I willing to ask for what I want? Have I made a decision that it will happen as opposed to merely hoping or wishing to become excellent at recruiting private money?”

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Key Takeaways

• You don’t need cash or credit to start. Private money is available if you have a system to recruit it
• Everyone can be a private lender using their IRA
• Use a presentation — 14 slides, 45 minutes, structured to guide the prospect
• Use Negative-Positive Language — “I’m not sure if our program will be right for you” makes them picture it being right
• Ask investor evaluation questions to understand their goals and decision process
• Show a sample deal to demonstrate how the investment works
• Answer common questions about security, paperwork, taxes, and IRAs
• Define next steps — amount, time frame, payment terms, paperwork, funding
• Take action. It’s only going to work if you do

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Disclaimer: This page is for educational and informational purposes only. It does not constitute legal, financial, or tax advice. Private lending involves significant risk and is regulated by federal and state securities laws. Always consult a licensed attorney, CPA, and financial advisor before soliciting or accepting private investments. Sample paperwork must be reviewed by a local attorney before use.