Dealing Successfully With High Net Worth Individuals
When I first started out in this business, I was intimidated when dealing with very nigh net worth potential investors. (Okay, I'll admit it: sometimes I still am!) I would question my own credibility and begin a negative thought spiral, telling myself things like, "You're new at this, why would they invest with you?" or "You're just a wannabe with no deals and no track record." Of course, by the time I finished beating myself up, I had saved them the trouble. I would thoroughly talk myself out of the chance to make a new connection with someone who might help me some day.
What I learned over time, however, was that high net worth people think differently than others. Unless trust funders who have spent their entire lives partying, they are usually quite sophisticated about investments. (How else did they get to be rich?!) They know that that they could lose some or all of their investment; it goes with the territory. What worries them more is people trying to take advantage of them and their wealth. Put another way, sophisticated wealthy people are far less worried about losing money honestly, as when an investment is done in good faith but just doesn't work out as planned, as they are about losing money dishonestly. They may not like losing money in a bad investment, but what they really hate is losing their money to thieves and con-artists.
This leaves the honest-but-inexperienced person in a relatively good position. Many wealthy people will invest with relatively untested entrepreneurs if they feel they can trust them. So, how do you get wealthy people to trust you?
The answer here is simple: good, old-fashioned relationship-building. If you know wealthy people already, you are a step ahead of the game, but if you have a chance to meet very wealthy people, focus on how you can build a relationship. And, as with anyone else, the best way to build relationships is by helping other people with things that matter to them, without looking for anything in return. Build goodwill. Build good karma. Most importantly, build trust.
Obviously, this takes time. Occasionally you get lucky with someone who trusts you right away and just happens to be looking to do real estate deals. But, in most cases, you need to put in the hard work of building trust over time, by building a relationship based on what value you can give. Never, ever sell them on your deals. Do, however, talk to them about your real estate business as casual conversation. It will sink in over time. And, perhaps they may be interested in potentially investing with you from the day you met, but they want to get to know you to see if you really are as trustworthy as you first appeared to be.
The great thing about trust is that it is transferrable from one activity to another. If you show someone that you are trustworthy by, say, being the volunteer who always shows up or by executing a leadership role in an organization very well, then that trust will spill over into your other activities. If you slowly demonstrate trustworthiness over time in another activity, and also tell people about your real estate deals in an indirect, non-salesy way, the trust you build up in other activities will get transferred to your real estate business, and people will begin to ask you how they can get in on your deals. (Doing successful deals is also an important piece of this puzzle.)
The bad thing about trust is that once you lose it, it's very, very difficult to get it back. That is why it is especially important to keep your word, follow through, and execute. Overtly selling people who have not indicated an interest to you is another way to lose trust. It can be frustratingly slow, but if you trust that the process of trust-building works and invest the time, it will greatly benefit you in the long run.
So, to sum up, if you want wealthy investors, build relationships with them by providing value first, gain trust by demonstrating trustworthiness in other areas, and never, ever sell them on deals unless they show a clear interest in being sold. If you follow these steps, you'll realize that very wealthy people are not intimidating. They just want to be treated like other people, and not like a big dollar sign.