4 Non-Obvious Ways to Raise Private Money For Your Deals
I was talking with one of my clients the other day about some ways that my clients and I have done to successfully bring on investors to invest in our multifamily deals. While most of them were obvious and straightforward, it was still good to talk about them in order to confirm and reinforce their validity. However, others were ways that we hadn’t really thought of before or we weren’t even aware that we did.
Here are the 5 not so obvious ways that you can use to increase your money raising efficiency going into the New Year.
Master the Art of the Phone Call
We get so caught up in emails and text messaging that we forget the art of the phone call.
Three deals ago, I had an investor that I knew was interested in my next deal. But, when the time came and I emailed out the offering, this investor never responded. Rather than giving up and finding a new investor, I picked up the phone and gave him a call. Good thing I did, because he decided to invest in that deal, and ended up investing BIG TIME into my future deals.
From this experience, I realized that there is a ton of different ways to receive and transmit communication, but different people prefer different methods. For example, I am very responsive to emails and I always pick up the phone, but I hate text messaging. Someone else may never respond to emails, but love to text. But I have found that phone calls have been the most effective way to bring on or to bring back investors or business partners.
Send Out Investor Qualifiers
This is a great technique, especially if you are concerned about having investors tell you that they are interested in your next deal, but when the time comes, they end up backing out.
Have your investors fill out an investor qualifier document prior to bringing them a deal. This gets them involved early on by reading through something and writing down their information. It doesn’t have to get personal or require a bank statement. It just has them express that they are a qualified, accredited investor. While it’s not legally binding, it establishes more of a commitment level since they are signing some documents. I’ve found this to be an effective way of curbing the “yes I’m interested” but then backing out when the rubber meets the road.
Increase Your Responsiveness
This is something that my clients who are very effective at raising investor capital are good at. My business partner is also very good at it. And I like to think that I am good at it too! One of the most important things for me in a business partner, whether it’s an investor or someone I am doing deals with, is to have an open line of communication and being able to talk to them very easily whenever I need to. And vice versa.
We are in a world where things are moving quickly and there are a lot of distractions, but people expect to hear back from you ASAP, especially investors and business partners. At the very least, you need to set expectations on your responsiveness. What I don’t mean is that you should be waking up in the middle of the night to respond to emails – unless that’s what you want to do. But if one of my investors or clients or business partners has a question, I am on top of it immediately.
I like to jump on things quickly and nip them in the butt, before they turn into a monster. The worst thing that can happen is to let a tiny problem fester and grow into a behemoth. This is avoidable if you make the commitment to address all questions, problems, or concerns right out of the gate.
Build Relationships as a Couple
Obviously, this is something that is really only relevant to those that have a relationship. When you build relationships with investors as a couple, it makes a huge difference because it adds another dimension. Ultimately, your goal is to build a friendship with your investors. So, if your significant other is getting to know their significant other and they become friends, that’s going to help from a long-term perspective.
For everyone that has a significant other, I highly recommend building friendships through couple’s dinners, evenings out, or weekends away. It definitely adds a level of trust and credibility because they get to know you and your family on a personal level.
I have found this to be one of the most effective ways to get a ton of investor referrals
I know that at least one of this money raising tips – starting to use the phone more, sending out investor qualifiers, being quick to respond, and building relationships as a couple – were a surprise to you. And quite frankly, they were a surprise to me as well. I just uncovered these things when I was assessing what was working and what wasn’t working that wouldn’t be obvious from a money-raising standpoint.
What are some non-obvious ways that you have been able to increase your business’s efficiency, whether it be raising money, finding leads, locating deals, etc.?