How to Overcome Objections When Raising Money for Multifamily Investing
Last week, I explained how one can know if they are ready to become a multifamily syndicator and buy apartment communities with investors while sharing in the profits. Essentially, the two requirements are (1) establishing an education and (2) having experience being successful in real estate investing and/or business. Now, that sounds fine and dandy, but even if you have met both requirements, potential investors may still have objections:
Well, I see that you have prior success working for a large corporation, but that doesn’t make me feel any more comfortable giving you my money to investing in real estate.
It is amazing that you’ve been able to flip all those properties, but you haven’t done anything in the multifamily realm. I don’t want to be your test subject.
How do you overcome these objections, aside from responding with “just trust me?” These objections are quite real. If you haven’t successfully completed a syndication deal before, then all the education and unrelated past success may mean nothing to potential investors. Therefore, to squash these objections, surround yourself with the right team members. Having a knowledgeable, tried and true team is the main way to offset any lack of experience you may have.
Here are a couple tactical things that you can do to build the right team and eliminate any investor objections:
Property Management Company
One of the most vital team members that can aid in addressing investor objections is a property management company that specializes in apartment communities.
- By going in the deal with you, the property management company will have their own skin in the game. They are incentivized to make sure that the deal goes smoothly.
- Since they have past and present experience managing apartments, they should have case studies that show their success. You can use their case studies as proof that your team has the credibility and experience to successfully manage the deal.
Also, you may even have the added bonus of the property management company bringing in investors of their own.
Another tactic is to find another experience syndicator that has already done what you are trying to accomplish. An applicable Tony Robbins’ quote is “success leaves clues.” We aren’t the first person to ever live. Nor are we the first to invest in real estate or raise money for apartment communities. Therefore, you don’t have to start from scratch. Instead, go out, find the best of the best in our given field, and follow the breadcrumbs they’ve left behind to replicate their success. They can help you along the way. And, you can leverage their experience to get the deal done and gain that credibility your investors are looking for.
A property management company and experienced syndicator are just two examples. However, there are many other professionals you can add to your team whose experience you can leverage – CPAs, attorneys, brokers, agents, etc. Ultimately, overcoming investor objections boils down to the team you surround yourself with and how you leverage those relationships to create credibility for you and your business.