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Posted over 4 years ago

Approaching First Time Investors

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Ask yourself the question:

What is the investor looking for? What does that investment ideally look for them?

Maybe they are looking for longer hold periods, maybe they were looking for shorter hold periods. Maybe they just like you. Maybe they're looking at assets that are just here locally. Maybe they want a certain return structure. Maybe they want to have something that's just for sub-portfolio diversification because they're really into stocks and bonds.

But you're not going to know that answer until you go forward and ask the question:

“How can I help you?”

Now say you're talking to your uncle, your aunt, your friend or business associate. Well, the second hurdle is that investing in apartment buildings maybe, to them, a brand new concept. Most people have never even heard of this concept, they might not even know that is available to them. Maybe they think it's only for big players and large institutional players and they can't touch it. With syndication, you have to go through the education process of teaching them about the investment, what it looks like, why you're doing it, and ultimately what it means to you? Why are you putting all this time and effort into this? Get beyond that objection of:

“I don't know what this is.”

They will understand, what you're doing with this and what this actually is.

The next step is now providing a mock deal and that mock deal can be the type of deal you're actually looking for. It's the “horse before the cart” scenario here, you now offering up an opportunity but you've never done this before and how are you going to raise money if you've never done this before and you can't close a deal if you don't raise money. Something you can do, something that we did to be very successful here is put together the ideal mock investment of what our ideal structure's going to look like. We went out to our investors, we talked to them, we got way ahead of it and said:

“Hey, we love apartment investing, we love it for so many different reasons. There's the ability to have cash flow, forced appreciation, depreciation, tax advantages, debt paid out so many different angles that we can use to grow wealth together. We're going to target these types of properties or interpret these select properties and that's what we're going to go after, I'm going to look for these types of returns from these investments.”

Now if this sounds like something you're interested in, what kind of commitment could we look for? Because it goes to the fourth step here. How do we know what kind of property we can go after if we don't know what kind of debt we can basically for and we don't know how much money we can raise? Now the third part is talking about the typical deal you’re looking for. Now here's where you have to stop. That's a lot. You may not be able to do this all over just one luncheon or over email over a quick call.


This may take a series of calls because you have to allow them to understand. Imagine if someone came to you right away and just gave you all this information, it's an information overload, well your first reaction is to say no, no to anything said because it's too much to take in. Give them time to analyze, don’t scare them off.

Learn more about multifamily investing: 
https://www.multifamilyfoundation.com/order-28415099



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