You’ve probbaly heard that you need an elevator pitch to be successful in real esate investing.
“Nah, I don t need one of THOSE” you might say…
How you present yourself to other people is extremely important – and how you do it has a lot to do with your mindset and how you think about what you are doing. But that’s the subject of another post…
Let’s get into the actual tactical stuff instead of the mental stuff on this one – because building your house flip team, looking for deals or announcing to your family that you intend to flip houses full time all require good elevator pitches.
And you need a really good one when you’re looking to raise money for your flips…
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
The House Flip Elevator Pitch Basics
How you introduce yourself to other people relating to your business is what is called your 60 second speech or known as your “elevator speech”.
When you’re brand new, one of the most important things to work on is how you relay what you do when meeting other people. This could be to people you know, it could be the general public or it could be other real estate professionals. How you actually do this is something that you can play with over time.
As we’ve discussed here many times, networking is extremely important to your success as a real estate investor. And your elevator speech is used when someone asks you what you do.
What will your response be?
The answer may be a different response based on who you might be talking to, but when it comes to elevator speeches, keep it simple. There are four things to keep in mind:
1. Pique, Don’t Pitch: Use statements that piques people’s interest but doesn’t pitch.
2. Engage and Interest: You want people to say after your pitch: “Oh tell me more about that” or “How does that work?” If this happens, you’re on the right track.
3. Share a Little: A good elevator speech shares a little information about your business and yourself. This then gives you the opportunity to tell a little bit more about what it is that you do and how you do it.
4. Adapt to the Event: A good elevator pitch will be adaptable with the kind of event you’re at. If I’m at a Chamber of Commerce event or a networking event, my elevator pitch will be geared more towards general real estate investing. At a REIA meeting, I’ll get more specific.
Elevator Pitch Examples – Basic
When I’m shopping, hanging around the neighborhood or in any non-networking situation, the “What is it that you do?” question invariably comes up.
I might sometimes not even mention my company name at all. I may say something like:
“I work with individuals and I show them how they can make a lot of money through the power of real estate.”
Notice how I just said what I said.
I made a statement that hits on all four points above.
In most cases people will then ask me, “Oh really? How does that work?”
These are what are referred to as “involvement statements” – a statement which requires involvement to the recipient of the statement.
I might also say something like this:
“Well I’m a full-time real estate investor and we invest for ourselves. We also show other people how to do it if they are interested in learning how to invest in real estate, whether they want to flip a house or do a buy-and-hold.”
People like to hear the “make money” part because it’s just a natural thing that people sort of gravitate to. Usually, this invokes a second involvement kind of question from them.
Elevator Pitch Examples – Investors*
*Keep in mind that I am merely giving examples of how I talk to potential investors, you need to create your own “pitch” and be in full compliance with SEC regulations. Consult your attorney if necessary.
When a meeting potential investors, I NEVER, NEVER, NEVER say:
“Would you like to lend me money?”
People have wanted to invest money with me because of how I approach them by saying something like this:
“I work with individuals and show them how to make a really nice rate of return on their money.”
The next question invariably from them is: “Oh, how do you do that?”
And then I might say something like:
“Well, we buy real estate and we use other people’s money to do that. We secure their interest with the real estate so everything is secure, it’s safe and sound. And we just give them a really nice rate of return on that money, much better than they could ever make on a CD or in a lot of cases what they’re making on their IRAs and what have you.”
I’m not mentioning what that return is and I’m piquing, not pitching.
People ususally respond with: “Can you tell me more about that? I might be interested in that.”
So what did I just do? I had a simple conversation.
I had no intentions of thinking; “Hey I’m going to go talk to that person and see if I can raise money with them.”
Not at all. It’s just a natural conversation by telling them what I’m doing and then if there is a little bit of interest on their end which may open their mind to it.
Keep it simple and don’t pitch and don’t make return claims. If you have questions on how far you can go in saying what you say, please seek legal advice.
Elevator Pitch Examples – Other Real Estate Investors
If you’re talking to other real estate professionals you may want to say:
“Hey my name is Tom. I’m a real estate investor.”
A better follow-up to that would be to ask them first this:
“Tell me a little bit about yourself and how you work in real estate.”
If they’re a real estate listing broker or something similar, it’s likely that they will understand the business.
They may something say something like this to you: “That’s great, we work with buyers / we work with sellers.” At that point, you could say;
“Would you be interested in working with an investor like myself?”
This might lead to a potential business arrangement with this type of real estate agent.
Elevator Pitch: Final Words..and One Little Gem
How you engage a potential contact with your initial elevator pitch and the give-and-take in a conversation is extremely important, no doubt. I always find that the low-key approach works best.
And the tactic I use all the time is to let the other person do most of the talking.
Most of us like to talk about ourselves. Its OK, its human nature.
Most new investors are tempted to say something like, “Hey my name is Tom Jones and I’m a real estate investor.” And then just keep going on and on talking about themselves while their audience starts thinking about what they’re going to have for lunch…
The most favorite topic of conversation for most people is themselves. Yes, its true.
So use this to your advantage! So few people do.
If you can get people to talk to you, YOU are in control of the conversation – even though the other person may think they’re in control because they’re talking about themselves.
You control the conversation by asking the other person the questions. And eventually the law of reciprocity states that they will return the favor so to speak, and start asking you about your business.
When I was a new real estate investor, I made the error of talking incessantly about myself because I was so passionate and so excited about what I was doing. I was so excited I would start talking and never give anybody a chance to tell me about themselves.
I think back to those days and just cringe!
Don’t make that mistake. Resist the urge to incessantly talk about yourself – no matter how excited you are about what you’re doing. People are always more excited talking about what they are doing.
Use this one and all the other strategies here and let me know how it works for you!
If you’ve made it this far, please leave a comment below! What do you think? What have you found works really well in your elevator pitch?
Please leave a comment and share your questions — or ask me anything you’d like about flipping houses!
Photo Credit: oschene