I FINALLY Understand What “Financial Friends” Are...


For decades, I’ve heard Pete Fortunato going on and on about his “financial friends” and “allies” and how important they’ve been to his enormous success in the real estate business.

As a relatively new investor, my limiting thought was, “Great, Pete, you’re a million years old [he was probably 45 at the time] and you’ve been doing this forever, and you have rich friends who’ve ALSO been doing this forever, who know that you’re super-experienced and able to perform.

Also, you’ve helped them with YOUR money or deals, so they help you with yours.

What in the world has this got to do with me? I don’t have the track record or the relationships with people with money that you have, nor the money to help THEM with THEIR deals, so move on and tell me how to buy houses with no money!”

Because I Just. Didn’t. Get it.

I thought that a “financial friend” was something like an actual friend or family member, who might, I don’t know, give you a loan at 0% interest just to help you get your first deal—a sort of angel with a checkbook who’d do whatever it took to get you the money you needed.

Or that it was a person in a mental rolodex of people who had money—like private lenders, or hard money lenders—who could be ‘convinced’ to give it to you IF you qualified and IF you were able to sell them on your deal.

And now that I’ve seen hundreds of deals made between financial friends, I finally get where I was wrong, and I’m hoping to help YOU get it before you waste years believing the wrong thing, like I did.

Because financial friends are neither angel investors nor purely transactional money people.

They’re folks who know you well enough to believe that you mean to do what you say you’ll do, and that trust that you’ll move heaven and earth to make a deal work, and that you’ll get help with things you don’t understand or can’t do yourself.

They’re people with whom you share important values—which are usually along the lines of “Stay educated, evaluate carefully, take action, fulfill my promises, invest in long-term business relationships, and give as much as you get.”

While financial friends obviously expect a return OF their investments and ON their investments, they’re MOST interested in building a relationship of trust and mutual benefit.

From what I’ve observed, financial friends aren’t just people you do business with regularly. They’re people with whom you have a long enough and deep enough relationship with that you WANT to do business with them. You WANT their kids’ CESAs to be as big as possible, and for them to get most of the ownership of a deal that’s exactly the kind of deal they love.

And they want the same for you. So, you pay their IRA 14% on this deal, because they’re trying to grow it, and then later on, they loan you money at a better- than-market rate on some other deal. Or they pay you 14% on the tiny amount of cash you have in your 401k, even though they don’t actually NEED that cash to do the deal. They just know that your 401K needs help and that a small 2nd mortgage on a property they’re rehabbing will give you that help.

With financial friends, it’s not about any individual deal. It’s sort of an informal, collective effort to make sure everyone prospers over a very long period of time.

I see this all the time at REIAGC, particularly during our Friday morning Propswap calls. Members making deals with other members that they wouldn’t make with just any investor off the street, because they want to build a financial friend relationship, or because they already have one and are willing to forego their “usual” terms to help out their financial friend.

The thing is, it HAS to be a 2-way street.

I can’t be your financial friend if I don’t feel like you’re out to be mine.

Sure, you might not have the spare cash to get into one of MY deals. But maybe you know that what I REALLY want is partnerships. So, you offer me a slice of ownership in your next long-term rental, even though you don’t, strictly speaking, NEED my money to do it.

You need financial friends. And if you want them, you have to get into the mindset that it’s not about THIS deal, it’s about ALL the deals we’ll do together in the future.

And if you want to really add rocket fuel to your “making financial friends” project, I’d suggest 2 immediate courses of action:

  1. Show up. You can’t expect to build relationships if we only see you when you need something. That feels like you’re only interested in what other people can do for you, not what you can also do for them.
  2. Be at the one-day workshop that Pete Fortunato, the master of Financial Friend- Making, is teaching in Columbus on May 17th. Yes, that’s a Wednesday, but it’s cheap, unique—and already more than 1⁄2 full. The whole topic is how to make financial friends, and you can register at OREIA.com.

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