This isn’t any sort of ground-breaking new real estate principle, but always be ready to talk about your business and private money! I’ve read other articles on BiggerPockets talking about this same principle, and with a recent experience of mine, you can throw me into the category of “believer”.
The point of this article is to offer encouragement that these sort of things “do” happen in the real world, and not just in someone else’s life experience. Before my chicken wing dinner, I was in the boat of, “wow, that’s awesome! Does that really happen though? Could it happen to me?”, so I’m here to report, that not only can it happen at any time, you need to be ready for it!
Whether you are getting started or a veteran, private money is the life blood to any real estate business (notice I used the word “business”. If you do it as a side hobby or just for a small amount of financial diversification, then you have much less need for it). You need to always have your elevator pitch ready, and understand your model enough to answer questions confidentially.
Every Tuesday night during the Summer I play softball with a group of guys. Not too long ago, after one of the games, a couple guys asked if I wanted to go grab some chicken wings. Private money was about as far off my mind as possible. I was too busying thinking about what I did wrong with my last swing, but even more-so by what flavor of sauce was I going to get on my wings?!?!?!
One of the guys I was with is moving (job promotion at work) and looking is looking to sell his current residence. That brought up the general topic of real estate, and then it happened…
“Hey Clay, how’s your real estate thing going?”
This is the time you need to be locked and loaded with your elevator speech (or in this case, your chicken wing speech). There are some great articles around BiggerPockets on elevator speeches, so I won’t go into much detail, but in a nutshell, it is a 60-90 second summary of your business, what you’re doing, and what you’re looking to do. I personally don’t have anything memorized as I do not want to come across as a robot, but I do have a very focused group of topics I know I want to cover.
“It’s going well. I have quite a few projects now finished and sold on land contract due to the huge demand for these types of deals. I’m now looking to expand by raising private funds from individuals.”
This was my elevator speech summarized. He (and the other guys at the table) all threw some questions my way about land contracts, how private funds work, and other various aspects. All good questions, but all questions I was able to answer with confidence.
Things ended with me telling the guy I would bring him my private money packet next week to the game. I told him he could look it over, and then the following week we’d grab some chicken wings again and talk it over. Remember, you don’t want to be pushy, but at the same time, if you sense interest, you want to make sure you strike while the iron is hot.
A week later at our next softball game, I handed him the packet and we tentatively made plans to talk it over. The guy is a very intelligent, so I had high confidence that after he went through my packet, he’d be even more interested. Sure enough, he “got it” and told me he was interested. The funny thing is, he texted me a few days later. So much for our “meeting in a week”.
He will be investing approximately $65,000 with me, so I have to say, that was quite a beneficial chicken wing dinner!
The moral of the story…
1) Be ready at any time!
2) Know what you’re gonna say!
3) Understand your business and model well enough so you exude confidence!
Image: Karla Campos