Timing here is everything. Once you've established yourself as a thought leader and built a solid reputation, it's time to unleash your investment opportunities upon your trusty investor list. Don't hold back!
Capitalizing on the power of referrals is another essential strategy. Referrals can be a game-changer in expanding your investor network. Cultivate relationships where referrals become a natural part of your interactions. As I've learned through my own journey, every time you touch those contacts, you can be asked for a referral.
But hold up! When you're asking for investments or referrals, be crystal clear about your target audience. Be specific, my friend. Don't be afraid to zero in on those who align with your investment goals. Remember, not all money is created equal. Seek investors who share your values and can contribute to your long-term success.
One useful trick is presenting the offering rather than directly asking them to invest. So, pose something like, “Hey, look, I've got this investment. This is what it looks like. You know anybody who might be interested in investing the deal?” Look at their reaction. What you're really doing is qualifying them and potentially their network.
The Investor Call
When holding an investor call, it's essential to follow these key steps:
- -Take control of the conversation, ensuring you guide the discussion and its flow.
- -Build rapport by quickly finding relatable topics, such as family or sports, and conduct prior research on the investors, including their social media presence.
- -Identify their specific needs, such as cash flow, tax savings, wealth preservation, or growth, to tailor your approach.
- -Establish credibility by conveying the achievements of both you and your company, using factual information without excessive self-promotion.
- -Lastly, ask for the investment or seek confirmation of their current or future investment, bringing the conversation to a decisive point.
You should be well versed with the details of the deal before talking to investors:
â—Ź Understand the average median income in the area.
â—Ź Be aware of the average rents in the market.
â—Ź Familiarize yourself with comparable properties (comps).
â—Ź Understand what needs to be done in terms of improvements or renovations.
â—Ź Be knowledgeable about the internal rate of return (IRR) for the investment.
â—Ź Determine the anticipated holding term for the property.
â—Ź Know the initial capitalization rate (going-in cap).
â—Ź Project the exit capitalization rate (exit cap).
When facing objections while raising capital, it's important to dig deeper to understand the true underlying concerns. Often, objections have layers beyond the initial objection. Take the time to explore the objection further to address the underlying issues. Examples of common objections include needing to discuss with a spouse, feeling it's not the right time, uncertainty about the location, or having funds tied up in other investments like a 401K, 1031 exchange, or the stock market. By identifying and addressing the core concerns, you can effectively overcome objections and build investor confidence.
Now, let's talk about strategy. Asking for investments and referrals requires some serious hustle. Get yourself a fancy CRM system to handle all that precious investor data. It'll keep you organized and help you maintain meaningful connections with your network. And hey, don't forget the icing on the cake—provide valuable content alongside your investment offerings. Flaunt those testimonials and celebrate your victories with your investors. Show others how easy it is to say yes to you!
