Finding financing is the biggest challenge for most investors. I previously wrote How to Generate Private Money, listing the 6 steps in brief. Over my next few posts I will break down each of these steps in detail; we’ll start with the 1st and 2nd steps today.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
Step 1: Pitch your opportunity to everyone
Goal: Get face to face meetings, get referrals, lots of them!!
Solution: Use an effective elevator speech, get prospects salivating to learn more and get the meeting. Always ask for referrals.
Solution 2: Give out free quality information. Giving out free information via articles, seminars, conference calls, webinars, etc is a great idea as it will build credibility, people will come to you and it makes it much easier to build trust. Set up the meeting and ask for referrals.
Elevator Speech: An elevator speech is simply a 15-30 second speech that tells what you do, what is in it for an investor and gets them salivating to learn more or refer others who might be interested. You want them to ask questions, but do not under any circumstance answer them.
Example: I am Real Estate Investor. We buy, lease and sell investment real estate and provide investment opportunities to the right people. Typically these people have some knowledge or comfort in real estate but hate the thought of owning and dealing with the hassles of managing property. We provide investment solutions to individuals who want to make good returns backed by real estate without the hassles. Does that all make sense to you? (Based on their response, ask for the meeting and referrals)
How to Ask for the meeting and referrals: If they seem disinterested, simply say “I’m not sure if this is for you, but who do you know that would be interested?” If they are interested, they will say me, otherwise they may give you some referrals. If they ask questions, do not answer them under any circumstance. Tell them “That is a great question, but there is much more to it. Why don’t we sit down and I will go through it with you?” If they hesitate, immediately say, “No pressure, it is not for everyone. Who do you know that would be interested?” If they are blown away and salivating, set up the meeting and ask them who they know that would be interested. Do not push or act desperate. Act confident, act like you do not need them to invest, act like your investment opportunities are the best thing since sliced bread. It never hurts to have a fun success story about the guy who passed on a deal but another investor jumped all over it and is now laughing all the way to the bank.
Step 2: The Face to Face Presentation
Goal: Build trust, credibility and get them to like you.
Solution: Give a presentation. Be on time, professional and respect their time. Small talk for a few minutes getting to know them, find similar interests, compliment them where appropriate. Ask about their investing experience and almost qualify them. Then get into your presentation: who you are, what you do, what is in it for them and details of the opportunity. You can find example presentation all over the internet, customize your own and make it simple and easily understood.
Solution 2: Use a credibility kit to show a track record of successful past deals. That will show that you have experience, expertise and will build trust that you will be successful in future deals. Give them a credibility kit to take with them.
Solution 3: Seminars, Webinars, Conference Calls, even online or youtube video presentations.
Do’s and Don’ts: Make sure all decision makers are present. Do not act desperate. Act like you have a ton of investors, you don’t need their money and it is the investment opportunity of a lifetime without being overly cocky of course. Do not ask them for money, rather offer them the opportunity to make a great return on their money. Always ask for referrals. Finally, always always always make sure you are following SEC rules.