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R AISING M ONEY

who have made or may be interested in making loans of the type you
are seeking. Agree to pay them a commission if they are successful in
obtaining a loan you find acceptable. Depending on the size and rep-
utation of the broker, there may be several different lenders willing
to make the investment and you can pick and choose. Any help you
can get from any source is better than going in cold. Spend time es-
tablishing a network of people who can be useful in turning a “no”
into a “yes.”

BY GEORGE ...BUILDING A CREDIT
HISTORY WITH BANKS AND INVESTORS

Early in my career when I first decided to invest in real estate, I was
given an outstanding opportunity to invest in mortgages. Recognizing
my inexperience in raising money, Alex DiLorenzo Jr., one of the two
partners in the real estate firm I worked for, said to me, “George, I’m
going to let you place a first mortgage on a good piece of property. It
will be $35,000 for one year with interest paid monthly at an annual
rate of 16 percent. Even though the property is worth $75,000, Sol
and I (two multimillionaires) will personally guarantee all payments.
Now you go out and raise the $35,000. I’m going to show you how dif-
ficult it is to get money from people even for a good deal.”
I thought this was a piece of cake since I had already lined up a
number of personal friends and relatives that told me they had money
to invest. A typical first response was, “George, I have full faith in
you and whatever you think is a good investment. I’m behind you
100 percent. Just tell me how much you need and when. You can
count on me.” However, when the time came to write out the
checks, the same people got cold feet and came up with various
lame excuses to explain their refusal to participate. I had already as-
sured Alex that I would make the mortgage loan and I didn’t want to
lose face. I got $5,000 from my mother-in-law but that was all I could
get from any outside investors.
(Continued)

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