Capital Raising Question for Sponsors & Fund Managers!
Gooood mornin’ guys!
I have a question that I have heard different thoughts on in my travels and wanted to ask it here! So I am newer to the capital raising & syndication game, and have a local partner that I have been working with. I have been raising capital for a bit, and also have a podcast where I interview sponsors throughout the nation, and also consume as many podcasts and books as possible etc.
My question is, I have already told the vast majority of my friends and family about my new ventures, and have a small email list with a little over 200 or so people on it. I have read in many places to niche down to a community that resonated with you to give value to on passive endeavors, and my demographic is helping active landlords that don't want the headaches of hands on management, and want to create passive wealth through syndications. I have a small team that I have put together with a 1031 specialist, an IRA custodian/specialist company, and a CPA to be able to help me to help landlords in this strategy. This demographic is the one that resonates with me the most, being an active landlord and constantly building relationships with local landlords etc.
That being said, now that I have told most of my friends and family, I am planning on following up with the monthly updates on my newsletter on our past projects (using Matt Faircloth's template in his new R.P.C. book), as well as increasing the volume of podcasts and value that I bring to the ecosystem. I already post on social media a decent amount about syndications, have a website that I add blogs to, have a VA doing outreach to followers and creating interactions, am becoming more present in some of the syndicator FB group, going to my first MF conference in NY in November, etc.
Do you think I should be doing some sort of cold outreach as well for those essentially “tired landlords”? Or just keep updating the folks that I already have with the monthly newsletter and creating more “attraction” based content and making more friends with sponsors across the country?
Thank you for your thoughts!
-Kyle :)
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Quote from @Kyle Curtin:
Gooood mornin’ guys!
I have a question that I have heard different thoughts on in my travels and wanted to ask it here! So I am newer to the capital raising & syndication game, and have a local partner that I have been working with. I have been raising capital for a bit, and also have a podcast where I interview sponsors throughout the nation, and also consume as many podcasts and books as possible etc.My question is, I have already told the vast majority of my friends and family about my new ventures, and have a small email list with a little over 200 or so people on it. I have read in many places to niche down to a community that resonated with you to give value to on passive endeavors, and my demographic is helping active landlords that don't want the headaches of hands on management, and want to create passive wealth through syndications. I have a small team that I have put together with a 1031 specialist, an IRA custodian/specialist company, and a CPA to be able to help me to help landlords in this strategy. This demographic is the one that resonates with me the most, being an active landlord and constantly building relationships with local landlords etc.
That being said, now that I have told most of my friends and family, I am planning on following up with the monthly updates on my newsletter on our past projects (using Matt Faircloth's template in his new R.P.C. book), as well as increasing the volume of podcasts and value that I bring to the ecosystem. I already post on social media a decent amount about syndications, have a website that I add blogs to, have a VA doing outreach to followers and creating interactions, am becoming more present in some of the syndicator FB group, going to my first MF conference in NY in November, etc.Do you think I should be doing some sort of cold outreach as well for those essentially “tired landlords”? Or just keep updating the folks that I already have with the monthly newsletter and creating more “attraction” based content and making more friends with sponsors across the country?
Thank you for your thoughts!
-Kyle :)
For raising capital, you will want to continue to build your list. I recommend doing some paid advertising on FB and google to increase your list. We use a marketing company to build a complete marketing funnel. Things like webinars on what you do as well as answering the most FAQ's tend to do very well. Cold calling for investors do not recommend. Cold calling for leads, again I think you may be better off doing paid ads and a landing page.
You could have a referral bonus, where if someone in your network knows of another tired landlord and convinces them to talk to you, that you send them a gift card or something. That might work.
But agreed with the previous commentor, unless you're trying to find deals from these tired landlords, targeting them to raise capital probably won't be the best use of time. Also if they're current landlords and best case scenario they decide to invest with you, they'll need to liquidate their investments before doing so, which could take a while before they can actually invest. You might be okay with that if you're playing the long game (seems like you've already had success with this niche), but just a thought. Good luck!
Quote from @Chris Seveney:Thank you so much Chris! That is an awesome direction to go, thank you so much for the recommendation! :)
Quote from @Kyle Curtin:
Gooood mornin’ guys!
I have a question that I have heard different thoughts on in my travels and wanted to ask it here! So I am newer to the capital raising & syndication game, and have a local partner that I have been working with. I have been raising capital for a bit, and also have a podcast where I interview sponsors throughout the nation, and also consume as many podcasts and books as possible etc.My question is, I have already told the vast majority of my friends and family about my new ventures, and have a small email list with a little over 200 or so people on it. I have read in many places to niche down to a community that resonated with you to give value to on passive endeavors, and my demographic is helping active landlords that don't want the headaches of hands on management, and want to create passive wealth through syndications. I have a small team that I have put together with a 1031 specialist, an IRA custodian/specialist company, and a CPA to be able to help me to help landlords in this strategy. This demographic is the one that resonates with me the most, being an active landlord and constantly building relationships with local landlords etc.
That being said, now that I have told most of my friends and family, I am planning on following up with the monthly updates on my newsletter on our past projects (using Matt Faircloth's template in his new R.P.C. book), as well as increasing the volume of podcasts and value that I bring to the ecosystem. I already post on social media a decent amount about syndications, have a website that I add blogs to, have a VA doing outreach to followers and creating interactions, am becoming more present in some of the syndicator FB group, going to my first MF conference in NY in November, etc.Do you think I should be doing some sort of cold outreach as well for those essentially “tired landlords”? Or just keep updating the folks that I already have with the monthly newsletter and creating more “attraction” based content and making more friends with sponsors across the country?
Thank you for your thoughts!
-Kyle :)For raising capital, you will want to continue to build your list. I recommend doing some paid advertising on FB and google to increase your list. We use a marketing company to build a complete marketing funnel. Things like webinars on what you do as well as answering the most FAQ's tend to do very well. Cold calling for investors do not recommend. Cold calling for leads, again I think you may be better off doing paid ads and a landing page.
Quote from @Snehann Kapnadak:Thank you so much Snehann!!! That is a really good point and idea!
You could have a referral bonus, where if someone in your network knows of another tired landlord and convinces them to talk to you, that you send them a gift card or something. That might work.
But agreed with the previous commentor, unless you're trying to find deals from these tired landlords, targeting them to raise capital probably won't be the best use of time. Also if they're current landlords and best case scenario they decide to invest with you, they'll need to liquidate their investments before doing so, which could take a while before they can actually invest. You might be okay with that if you're playing the long game (seems like you've already had success with this niche), but just a thought. Good luck!
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@Kyle Curtin, sorry if I am missing something: you are targeting current owners/landlords. Your goal is to show them they can sell their properties (to you or just in general) and through 1031 exchanges, move into a passive role through syndication. Presumably your syndication.
Do I understand that correctly?
To broaden your tool kit, also look into a Deferred Sales Trust. This can possibly be an option that creates similar effects to a 1031 without the sometimes onerous timelines.
While I do think there is a market for tired landlords, the initial challenge I see in your approach is the hassles of bringing in 1031 proceeds into a syndication are fairly onerous. That is why most groups have about $1mm minimums for 1031 to be worth while. And while I know the point of the marketing is to make yourself the first choice in accepting it, and you can set the bar lower, you also have to make sure you have offerings available within the 45 and 180 day timelines, your lenders are okay with your structure, your investor is likely okay signing on another loan for a new asset, etc.
Raising capital is likely the hardest thing we do. I truly struggle with it. We started this company prior to the last crash to purchase discounted commercial non-performing loans from banks, get the properties back, and sell them to REITs. I couldn't get investors to listen. Investors talk a really good game, but get alligator arms when it's time to cut a check..."oh no! I can't reach my checkbook." We TONNED IT early on then everyone wanted to pile money in, but the market had already changed. With the market starting to turn again, we're back into capital raise mode, but investors, once again, talk a good game, but balk when it's time to cut the check. We're got a long and extraoridinary track record, but investors still chase returns saying "I'll wait until the market jumps up a bit." I wish you well, but it's really, really hard.
Agree with Evan here -- easy to say, and hard to continuously pull off if 1031ing the basis of your biz plan.
Also, repeat clients and word of mouth is always the best way to grow a business first -- those are our two largest sources of capital. Paid advertising is a factor but much less so than those top two.
Be careful with referral bonuses as there could be penalties for "paying" for referrals. There are some semi-recent "finders fees" that allow for some of that. We don't pay for referrals but they come naturally from family/friends naturally sharing as they are happy with their investment.
All the best!
Hi @Kyle Curtin, I'm also an owner of a syndication company and capital raising is the hardest piece of the puzzle. However, it's a place where a dollar spent can sometimes make the most impact. I'd also suggest SEO optimization, Google & FB Ads, as well as a lead magnet on your website to get investor information. In addition, market yourself and your company on social media to add value to your investor base. The key here is to be consistent and to tweak as you go. You want investors to see that you're offering valuable content so you're seen as a thought leader. Best of luck to you, Kyle!
Kyle - I dont know how deep you want to go on this, but probably my answer will be different to a lot of investors here. If you want to master this and attract more passive investors I would read the Russel Brusson books about finding your customers and interacting with them. Right now I am reading the Dotcom Secrets. It will give you a lot of insights, like what Dani mentioned of lead magnet and etc.
Good feedback from the previous posters. My only addition would be to create smart email drip campaigns that get these people converted to booking a call with you. Ultimately you want to be talking to them now before you actually want their money.
Good work on the podcasts and email updates you want to bring value to people by "sellucating" them, educating them while subconsciously selling them on why they should work with you.
If you go the FB/Google ads route focus your ads on one clear call to action and hit on emotions with your messaging as people feel before they think. For investors, the primary traits to think about are hedonism and achievement.