How "This" Little Strategy Can Help Your Private Money Raising Efforts by 500%

You and I have never met.

But I think I know you a little.

You don't like to make people mad. The thought of having another human upset with you makes you uncomfortable. You like to resolve all conflicts and issues or you have a hard time sleeping. You like to be a people-pleaser and value when others talk highly of you.

How am I doing so far?

Good?

Don't worry...I've just described myself, too.  It's just human nature. You feel better when other people like you and say good things about you.

So what's wrong with this?

Nothing...unless you want to: a. make a lot of money in business or b. raise capital for your real estate investing business.

Sometimes we have to get away from our natural tendencies in order to get results.

Let's back up for a second...

There's this one old country song that goes something like this: "Son, you've got to stand for something or you'll fall for anything..."

I think there's a lot more business sense in these song lyrics than even the singer may have realized. Why? Because "standing for something" is one of the most important marketing principles.

It's called "positioning."

Positioning means you can't be all things to all people It means you're going to have to rule out a lot of potential prospects so you can get to the ones that will invest money with you.

And you should put this right up there toward the top of your private money raising "to-do" list. Before you starting getting your website designed. Before you prepare your business plan. Before you even get your business cards printed.

What do you stand for?

Not in a patriotic way (although there's no problem with being patriotic). In a purely business context.

If you want to get private money to buy real estate investments, you absolutely must stake out a 'position' in the mind of your prospective private investor. Otherwise, your message will bounce right off.

The worst spot for a business to be in is when they try to be all things to all people.

Naturally, as a real estate investor seeking to raise capital for your projects, you cannot be all things to all people. You can't offer FDIC insured deposits. You can't offer people the potential to triple their money in 10 days like a penny stock.

But you must take care to create a position in the mind of your prospective investor which puts you in your own category.

Want a tighter definition of "position?"

Here goes:

Picture your prospective investors mind like a grocery store. This is how the investor's memory stores relevant information. There's an isle for cereal. There's an isle for condiments. And so on.

Your investors brain can only remember (on average) up to 3 brands or companies in any one category that they buy from regularly. All the other brands and companies are lost. Blanked out and forgotten.

Your "position" means exactly where your prospective investor sees you on their grocery store shelves.

Since Kelloggs, Post and General Mills  have all occupied the shelf space for cereal already in your prospects mind, it would be difficult for you to stake a claim in that area. After all, it would take major effort and time to dislodge a lifetime of messages which created this shelf-space monopoly.

If you had cereal to sell, a good option for you would be to create a completely new food category and then own the shelf space in that category in your prospective investors mind. This option would be a lot more profitable for you.

It's the same with investments.

When your prospective investor thinks of investments, they most likely think of the big guys (Merrill Lynch, Ameriprise, Fidelity, etc.). And when you shout at them a message of "earn 12% secured on your money," they are going to put you in the category of investments. Your shelf space will be limited.

You've got to carve out a position for yourself, so you can occupy space in your investor's mind. From there, you communicate a strong benefit driven message.

It's not as hard as you think.

For example, you could take the position (which I do) that the stock market is an evil, ugly and manipulated gambling mechanism not suitable for the average person to place their life savings. Here's how I stake out a position in the prospects mind:

"7 Things You Financial Planner Isn't Telling You - And How It Could Delay Your Retirement"

Simple. Straight to the point. Benefit driven.

I've told them a lot in one sentence, haven't I? They know that I'm not a financial planner (e.g. lumped in with all of the other guys in their mind). They know that I have information they want (e.g. I've positioned myself as an expert). They know that I'm on their side. They know I'm no particular friend to the financial services industry.

In fact, it's just as important that your prospects know what you DON'T do, as it is they know what you DO.

How you position yourself has a lot to do with who your prospective investors are.

If your prospective private money lenders are accredited investors (e.g. wealthy individuals), you might want to take the position where you are providing:

"an opportunity that investment insiders would kill for..."

For the wealthy individual, this type of position lets them know you aren't just offering the "same old, same old." You aren't trying to manage their assets. You are a firm which has access to investments they cannot get anywhere else.

Bottom line: whatever you do, please take just a minute or two answer this question for yourself:

Why should my prospective investor listen to what I have to say?

If the answer you came up with is: "because I offer 12% returns" or something like that, then you're being mentally lazy. Try harder. Come up with at least 3 unique reason why someone should do business with you instead of the next guy offering to manage their money.

• Do you specialize in a certain type of investment (e.g. apartment rehabs, mobile homes)?
• Do you offer a special type of tax advantage?
• Do you offer anything else in addition to funds placement?

The worst thing you can do when raising private money is get lazy and start down the same old track of just talking returns. While this may well be the deciding factor for the prospect, when you give them something else to go on they will put you in a different category and you'll have a much better shot at the dough.

-Happy Investing