When it comes to raising money for your real estate portfolio, the biggest piece of the puzzle comes down to one person – you. Marketing yourself becomes the most important activity in your tool kit and getting out in front of potential investors is how you’re going to grow your business. Pitching yourself and your strengths is more important than the deal you want to make and becoming the most effective communicator you can be is critical.
As a sophisticated real estate investor, you are in tune with the people you are surrounded by. Sticking out from the rest is the only way you can expect to make an impact on your potential investors. Get noticed, build a relationship and build a partnership that benefits both parties.
Stand Out From The Crowd
Your job as an investor looking for partners with capital is to tell, not sell. What does this mean, you might ask? Paint a picture, create a story, but don’t come at them from the used car salesman angle. You are in the business of building relationships and leveraging your knowledge, along with their money, to create an investment plan that benefits you both. You need to be willing to talk about your vision for your real estate business and how that translates into the details of the real world.
In the past, we have talked about different levels of contacts in your personal network. There are three levels starting as close to you as possible and moving further away, but for this purpose we’ll focus on Level 1, your Inner Circle contacts. These are the people that you know personally – doctors, dentists, friends, family – the people that you already have a close relationship with who will likely pay close attention if you have an opportunity that interests them. The focus for you is going to be turning your day-to-day interaction with these people into potential joint venture deals. If you’re not sure how to make that work from the get-go, approach the topic like a business assignment.
You want to decide what you will say when people from your Inner Circle ask you what real estate investing has done for your life and what it enables you to do. You can be extremely honest with your Inner Circle contacts because you have already built that important relationship with them over months or years. You want to share what you do and why you are successful – this is just another step in cultivating that relationship. The more trust you build, the more likely they are to put that trust in you in the form of capital and a partnership in a real estate transaction.
Communicate clearly – tell them exactly what real estate allows you to do:
- Improve cash flow, perhaps to renovate your home without borrowing money, or to finance a regular holiday with your family.
- Build long-term financial security and finance a comfortable post-retirement lifestyle.
- Put your children or grandchildren through post-secondary education.
- Help your parents or in-laws pay for a good retirement home, or retire early themselves.
- Be financially supportive of a charitable organization that is especially important to you.
When your vision for the future includes joint venture partners, you want to share that information, too. There is nothing wrong with letting them know that their money is part of your plan to grow your wealth. The best part about this is that you’re also giving them an opportunity to grow their wealth at the same time. Talk about the way you and your partners share risk and profit and how your knowledge will be used to minimize the risk while maximizing the returns.
If you bring something extra to the table, like real estate market knowledge, lender contacts, insider knowledge about what a certain tenant pool wants in rental housing or renovation expertise, plan how you will talk about those details when people ask you about your real estate investments. People in your Inner Circle may already see you as a real estate investment expert, but they won’t necessarily know what that means. You need to provide the CONTEXT for real estate investing: How will it fit into their life? What can they expect to see in terms of a return on their money? These are the questions that you will provide answers to as the sophisticated investor you are.
Considering embarking on the journey of real estate investing or already have your feet wet? If you’re concerned that you don’t have the monetary means to take your investing career to the next level, you might reconsider. This Saturday, June 16th in Toronto, we will be solving real estate investors’ biggest challenge – lack of capital. I will personally be teaching, along with Russell Westcott, Richard Dolan, David Franklin and an expert faculty of instructors, all of whom have raised millions of dollars for their real estate portfolios. The best way to step up your game is to surround yourself with those who are doing it and doing it well.
Register for the Toronto Raising Capital event.