Posted about 1 month ago

How to Have a Successful Money Raise?

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It’s a topic we hear about time and time again, how do I raise money? Well the money is everywhere, however, the most important thing here is that you make sure that when you are raising money that you're not just focusing on “I need to raise money, I need to get this money, I need to do this, I need to do that”, because nobody really cares.

Really what the focus needs to be is you have to focus on the investors and what did the investors need, what is their focus what are they trying to gain, how are they trying to have an investment lifestyle and what kind of investments and criteria they’re after, what makes them happy, what is too risky for them, so when you're sitting down to have these meetings with investors you have to put the focus on them because if the focus is all on me, me, me and I need money for this deal, so we can close this deal, well you're probably going to hear a lot of noes and maybe you're not on really certain why, but because you're not listening to what are the actual needs of the other investors.

You may have a lot of great investors out there and the reason you're not able to bring them within your reach is that you're not understanding what they actually need, maybe these investors want more of a short-term investment horizon, maybe they're more comfortable around flips, maybe they're not comfortable with investments out of state, maybe they don't understand the model, because you just really talked and on a level that they're talking about.

So what is it that the investor needs and if you can understand that it's going to make your money raise that much easier, well why don't we try this for the folks out there, well we try a little bit of a role play, I'll be the investor that you're talking to, so we're at a meet-up, I tell everybody at the meetup, “I am just starting, I have a 401k and I have a good amount of money stashed in savings, I just don't know where to go with it, I have a great property, give me your money”. Big no, no, to this conversation. And it should be more like, “that's why I came to this meetup, I really want to learn more about this, you know my parents used to do it, they used to be in real estate, they actually did really well for themselves, but I decided to go another way and you know I decided to come back and I heard about your meetup so I that's why I'm here.” , “it's great what kind of investing are you looking to do? Are you looking to do the investments yourself?”, “no I'm still working, I have a 401k, I work for a large corporation right now, at some point I'd like to and I want to be able to leave if I can, I want you and I have a good foundation for my family and real estate really just seemed like the way to go.”, “great have you done any kind of investing into the stock market or mutual funds or what would have you invested right now?”, “right now I have some my money and neutral funds, I have a couple of bankers I'm working with, I don't really pay attention that much, I'm really busy, they said to put my money here so I put my money there and I won't have more, I don't control my money, I'm really looking at these the large multifamily and me heard you were talking about syndication and that seems really interesting, it sounds like something I'd like to get into because I really want to build generational wealth for my family and I don't think I can do that with the stock market.”, “sure and have you thought about the advantages of investing with apartments? “I have and I don't know much about it, but you know I've heard great things about you and your team and I'd love to have like a longer conversation about it”, “sure, you have the ability to really gain from of course cash flow and appreciation, there's depreciation and there are tax advantages, those are just some of the high level components that really make investing in apartments very attractive and on that point what we look after is we act as the active managers of the property and we look for passive investors to help us really pull our money to be able to borrow larger property so we don't benefit from the economies of scale”, “awesome that sounds like something I'd be interested in, so how long would you have my money and how much would it be to buy in?”, “expected timeline is five to six years, would be our whole period and our returns would vary based on what we're doing with the property”

So you kind of see where this is going, now you're engaging with a conversation with somebody I think you've just met or maybe if it's somebody that you've known for a while and you're getting in their heads, you're realizing what they need and don't forget to write all this down, as I said, you need to see where this is going, have conversations look into what the other person needs it's, not necessarily what you need, it's what they need and that's how you're going to get the money.

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