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Posted almost 14 years ago

Using the Internet to Get Private Money

This is a subject I've wanted to tackle for quite a while...using the internet to get private money.

For today, I'm going to leave out the legal "nitty gritty" - as that could take up a few pages in itself. Instead, I'm going to focus on the practical aspects of it.

First, I need to get something off my chest: if you want to use the internet to attract prospective investors to your opportunity, please stop using the garbage industry slang "...X% secured by real estate..." as well as using the term "private lenders..."

If you're doing this right now, whack yourself on the head with a rolled up newspaper. Bad dog. Ok, you probably want to know why you shouldn't do this...you probably want to know why, considering there are a lot of companies who will build "custom private lender websites" and the like for a pretty penny.

It's all about... getting results instead of spinning your wheels.

Attracting private investors to your opportunity is all about the right marketing. The standard dogma that somebody trumpets about how you should broadcast "x% secured by real estate" really doesn't hit home with many prospective investors. Plain and simple: people that will invest with you simply aren't searching for this stuff on the internet. Want to know who is? Other real estate investors, that's who. People who want to get the same private money you do. You don't want this kind of traffic on your website.

Not matching your message to what your investors are looking for and what interests them is a mistake. This is akin to a computer maker leading their marketing with the fact that they offer a full 1 year parts warranty. Nothing wrong with offering the warranty, it's just that people don't look for that when they're looking for computers.

As far as using the term "private lenders" goes...well, I can say that veritably NONE of my private lenders think of themselves with that particular moniker. They think of themselves as "investors" and, typically "partners". Even though they may very well be private lenders, they don't think of themselves that way. It's a term we use in the real estate investing industry that the general investing public is unaware of.

Also, please stop trying to close the deal right on your website. Most of the real estate investors website that I have seen pretty much brow beat the visitor over the head with a sales pitch without really showing the benefit for the investors. There's no compelling reason to do anything. The best of these sites I have seen (which my coaching students have solicited  my help on as well as randomly looking once in a while via Google search) simply asks the investor to submit information to receive a prospectus.

Not a great call to action.

I mean, why should the investor request a prospectus, when they don't know anything about how investing with you works.

These sites that say "become a private lender!" make me want to vomit. While there may be isolated cases of results with this, I haven't seen any evidence of long term success using this approach for purely online generated leads (via organic search, link or landing page from PPC or email). This "become a private lender" message simply doesn't resonate well with the demographic of your prospective investor target.

The only way this type of approach works, is if you have established yourself in another sphere as an expert, and the hits to your website are being funneled there from other sources that pre-qualify the visitor.

If you are going to generate traffic to an online website, your website should present an extremely unique and compelling story. You should explain (in simple terms) the benefits you provide your investors. You should make the entire purpose of your private money attraction website to generate qualified leads and build an email and physical mailing list. Your website should be the first step in a multi-step, qualifying private money attraction campaign.

Since I rely so heavily on offline promotion (direct mail, space/print, etc.), I'm often asked what "makes me an expert" in online marketing.

Well, I don't hold myself out as an "internet marketing guru" (though I'm sure my experience and pure profit results in this sphere dwarf by many times what some of these alleged  internet "guru's" have done). However, I do spend close to 5-figures each month on online marketing (I pay Google a lot of money, but I also make more off of them) and I've spent a great deal of time over the past several years honing my approaches. Testing to see what works and what doesn't.

You should never rely on just one way to generate interested private investors. That would be like me telling you (if you owned a retail clothing store) that the only way you could get customers in your door was to advertise in the yellow pages. Not true. If you did this, you'd be dead in a week and liquidating your inventory. If you did own a store, you'd use every profitable means possible to get customers in your door.

Same with private money.

If you rely on just one way to attract investors - say, if you solely relied on the internet - then you could expect about the results you'd get. Now, if you're really, really good you can laser focus like this. Personally, I want to raise private money quickly, so I employ a variety of tested approaches. You should use an integrated approach combining online, direct mail, networking referrals and others to raise private money in a hurry. You results will be much better and you will lose out on less deals this way.

Use your website as a lead generating tool. If you don't have the right sequence in place, you shouldn't' put up a website. Take your time and do it right. This way, you won't drop the ball with a good opportunity.

-Happy Investing





Comments (5)

  1. ok Adam, you make a compelling case. So how do you actually use the internet?  I have a site and I explain in great detail what an investor can gain and what we do to ensure their funds are secure and exactually safe. I have found that many people are afraid to try anything new so they just keep their money in a sock under their bed the rest want a 20 percent return, when they should know that is impossible. If someone is offering you 20 percent, it's a scam. You want to know what I think, our industry has a bad reputation because to many real estate gurus fleece the general public with unrealistic programs that promise get rich quick schemes that never work except to enrich the people running the con, anyone reading these words know exactly what I'm talking about!


  2. Good post - Reinforces my suspicions


  3. I just rolled up a newspaper and whacked myself on the head. Thanks for the advice.


  4. Thanks for sharing your marketing approach. I enjoy all of your posts because they are packed with useful information.


  5. Nice post Adam. I am looking forward to learning more about the right approaches instead of what not to do. We are thinking of selling premium content and distributing a massive amount of "regular" content for site visitors to monetize our traffic. Ad space is also of interest. I would be interested to hear your comments about this.