Raising private capital is vital to success in the real estate industry. As a multifamily real estate entrepreneur, you understand the challenges of convincing potential investors to trust your business with their money.
But don’t worry, Agostino Pintus, a successful real estate entrepreneur and expert in raising private capital, has shared his five-step process for approaching investors. Follow these steps and you’ll be on your way to securing the funding you need to take your business to the next level.
Step one: Establish yourself as an authority. Before you can make an offer, you must establish yourself as a go-to person for real estate investing. Use a multimedia marketing approach to make sure potential investors see you everywhere they look. Send them emails, invite them to monthly seminars, and produce educational content to cement yourself as their first point of contact when it comes to all things real estate.
Step two: Identify your ideal investor. To have the best chance of converting an individual into an investor, you must have a niche target market. In all branches of business, only certain types of people are going to pay for your product or services; the real estate sector is no exception. Identify the characteristics of your ideal investor, and position yourself in environments where you can connect with them.
Step three: Craft an irresistible offer. To present an irresistible offer, the investor needs to see not only the expected return but how quickly they will get their principal back. The ideal offer has a good yield, upside potential, and the investor is in the deal for 12 months or less.
Step four: Use a proven sales process. Use a sales process that has been proven to work. Start by contacting your potential investor and explaining that you must have a pre-existing relationship with them before they are legally allowed to invest with you. Ask them some questions and find out what they’re looking for in an investment.
Step five: Know your ideal social setting. Once you have identified the ideal avatar for your potential investors, you must position yourself in an environment to connect with this type of person. Using the example of your avatar, the e-commerce investor, you can set e-commerce seminars as a fitting location. Now 90% of the people around you are potential investors who are trying to produce multiple streams of steady cash flow.
By following these five steps, you’ll be well on your way to raising private capital from investors. Remember, the key to successful interactions with potential investors lies in your plan of action. So put in the work, and you’ll be reaping the rewards in no time.