How to Get People's Attention to Invest With You

First of all, you’re not going to go out and tackle two bigger projects, so start small. Your first investments are likely to be with your family and friends or those business acquaintances that you know. I would probably start with a triple net lease type project. You could do something like a Family Dollar, Dollar Tree or Dollar General. All of those are a triple net lease. You can do some other type of small investment. I’ve seen some groups do these with fourplexes. It’s unwarranted with a single-family home. With a small real estate deal of $1 million or $2 million, you could do this.

I would advise people to, first of all, make sure that the project you’re doing is not only suitable for the type of investment that you’re seeking. These things have a situation where they’re small enough but perform well enough. You can give the type of return that you want to give to the investors.

“You’re not going to attract any investment capital unless you can give a return that is suitable.”

You’ve got to provide some preferential return to these investors to attract them and be able to compete with the others. If you can do that, you can be a small syndicator, get started, get going and they still didn’t do well.

Another great way that you can improve your business and reach more people is through social media. Having conversations with other people on their podcasts and shows is a great way to get exposure and your message out to potential investors. One of the best sources that will help to develop a good database is LinkedIn.

For instance, my previous podcast guest told me a story where he went to the State Securities Division one day and said

“Would you look at my tax return and see if I filled out the forms correctly and if I’m paying enough in taxes? I understand that for me to do these projects, I have to have a pre-existing business relationship with these people who I’m doing business with. How do I do that? What qualifies as a preexisting business relationship?”

They responded by informing him:

“Family and friends can qualify to do that”

He followed with more questions:

“What other documentation do I need?”

They said:

“If you have business relationships.”

He questioned again:

“How do you verify that?”

They said:

“If you’ve got a business card, you can talk to them and they might talk to you.”

He decided to work on that angle. In his LinkedIn at the time he had about 250 first-tier connections, it wasn’t very big. He asked if those people would qualify.

They informed him:

“Yeah, if you’ve got a first-tier connection with some individuals that say they’ve reached out to you and you’ve reached out to them and you’ve established a relationship.”

He then asked:

“How about my second and third-tier? I have over 1,000 of those connections.”

They explained that:

“We don’t think those guys qualify because you haven’t reached out to them. They’re just people that you could reach out to.”

He went back to his office and said:

“If first-tier connections qualify as pre-existing business relationships, I better get with it.”

He capped out at 30,000. Now he’s trying to figure out how to grow beyond 30,000. LinkedIn stops you at 30,000. It has been a terrific avenue for him to raise equity capital and develop relationships. He sends out monthly newsletters. It has been a good format for him to grow his business.

The social media side of the business is where you need to go if you’re going to reach out to investors. You can find a good project if you work hard enough. The hardest side of that ledger is developing the relationships with the investors and getting yourself known so people feel comfortable working with you and trust putting their equity capital with you. It’s a big responsibility to be in charge of that capital. Often, capital takes years and years to accumulate. You don’t want to destroy that relationship or lose their money.

The best thing that can contribute to your business and is to always make sure to give investors a fair deal. That seems basic, but not every deal is going to work out the way that you plan. You’ve got to be able to have the intestinal fortitude for when a deal isn’t working exactly as you expected so that you’re willing to reach out to those investors, be honest with them and tell them what’s going on and the solution that you have for the problem that exists. You have to reach out to those investors and say:

“Here’s where we are now. Here’s our model. Long-term, we know we’re in the right market. It’s growing the way we want it to grow. As the project gets stabilized, we’re going to hit all our numbers. You have to be patient with us getting there.”

Once they know that, they will be more willing to work with you.