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Growing your investor database is a critical part of successfully scaling a real estate investment business. If you’re looking to take down more real estate investments, you need to raise more capital. You could use your own money, but that isn’t scalable. Leveraging other people’s money, or OPM (other people’s money), makes this process much easier. Raising money is a skill experienced investors have mastered. Outside of a family member or a business partner who can invest, there is an abundance of capital out there. Unlike other investors who focus on building relationships with a few accredited and sophisticated investors, it is possible for you to reach a wide group of investors who can bring their personal capital to your next capital raise.
Many investors face challenges with consistently finding new investors to add to their network. This can make the search for new real estate investments scary. What will happen if you find a real estate investment, and don’t have any investors to raise the capital you need to close it?
Keep reading, and we’ll break down the 5 secret ways to scale your investor network and grow your investment portfolio. The best at raising capital for real estate investments use these tactics to build massive investor networks, and are able to raise millions consistently.
Many investors have a proven track record, but don't have access to the investors they need to fund their investment opportunities. If you use these tips and implement them, there’s no reason you can’t also raise more equity for real estate.Are you ready to raise money with ease?
* Starting a podcast has many benefits, and the work it takes to launch and maintain one can advance your ability to raise money. As the host of a podcast, you position yourself as an authority and a thought leader in your real estate niche. People will look to you as the expert, even if your guests do most of the talking. Also, just by associating with high-caliber guests, you become more notable. You give yourself social proof by interacting with your guests, and people will associate you with them.
* A real estate investor can use a podcast to capture passive investor leads. At the end of each podcast episode, you can include a call to action. This will allow you to funnel potential investors into your database, where you can send them emails, nurture them, and encourage them to book a call with you. A podcast is just one type of thought leadership platform, and it’s a great way to educate people while also giving them an opportunity to get to know you.
* Writing a book can also establish you as a thought leader in the real estate space, and help you raise more money for your next real estate deal.
* Most people will assume that because you wrote a book on the topic, you are credible. People don’t even have to read the book in order to see you as a thought leader in commercial real estate.
* If you’re worried about not knowing enough to write a book, don’t worry. There is a plethora of information available to you online related to commercial real estate investing. You can collect research from other sources, and make it your own. As long as you avoid plagiarizing, you can write a great book that will put you in front of new prospective investors.
* Getting the word out about your book will give potential investors an opportunity to learn from you. Teaching people offers them value, and they will trust you because of that. It’s human nature to want to get to know someone before doing business with them. Writing a book is a way a real estate investor can build relationships with multiple people at once.
* Writing a book is also a great way for you to get on podcasts in your niche as a guest, where you can advertise the book and yourself. Once you build a community of raving fans who love your book, they are much more likely to want to learn more about investing with you. The book can be on any topic within your niche. It doesn’t have to be that long either, as long as you lead with value and provide quality content. Writing a book is a great option for a real estate investor looking to grow their brand and raise capital for their real estate investments.
* Another great option to raise investment capital for your real estate deals is starting a meetup.
* Starting a meetup allows you to position yourself as an authority in your local community. As the host of the meetup, people will look to you as the leader. At your event, people will walk up to you to meet you. If they like your event, they’ll tell their friends, and might even give you credit. This builds your reputation, and causes a ripple effect that serves as a unique form of marketing.
* At meetups, you can speak on a particular topic, like interest rates, and offer your attendees value in the form of education. You can mention your track record, and explain your investment strategy. You can also invite your business partners, and this association with successful real estate investors will only add to your credibility. As the host of the meetup, you are bringing passive investors to you.
* Many other investors have raised capital for their real estate deals at their meetups. That is why it’s a great way to raise capital for commercial real estate investors.
* This option doesn’t involve as much work as starting your own podcast, but still helps investors looking to raise money for their real estate deals. Other real estate investors who host a podcast are great at conglomerating audiences interested in similar topics. They likely find investors from their podcast audience, and this is how they fund their real estate projects. A real estate podcast will attract people interested in real estate or becoming real estate investors.
* For real estate investors looking to raise capital, being a guest on multiple podcasts gives you access to that podcast’s audience. If you want to raise money for your real estate investments, where better to market yourself and your business than in front of an audience of thousands of listeners interested in real estate? The podcast hosts do all the hard work, and in exchange for your time and the value you bring their audience, you get exposure to their audience. That’s a win-win, and you’re sure to meet more passive investors by putting yourself out there. Getting on more podcasts is a proven method of raising equity for real estate.
* Attending real estate conferences is a popular way real estate investors raise capital for their investments. You can meet both sophisticated and accredited investors at networking events. Many of these investors attend events looking to invest in an asset class that generates cash flow. Your investment opportunities might be just what they're looking for!
* When you’re at a real estate conference, it’s normal for you to hand out business cards. The secret to networking the right way is to make sure you get potential investor’s business cards. By obtaining a potential investor’s contact information, you can follow up with them. The worst thing that can happen is you have a ten minute conversation with someone interested in investing, but then you don’t ask them for their phone number or email address.
* You don’t want to give them your card and expect them to reach out! By getting their contact information, you can make sure no potential investors fall through the cracks! If they don’t have a business card, ask them to put their phone number or email into your phone. Then, make sure to add their name, and include any important information in the notes section, like where you met.
* After the event, following up with every potential investor lead is critical. If you want to increase the chances of this being a valuable connection, make sure you are intentional with getting to know the person. Again, people invest with those they know, like, and trust. So, following up with a person via email or phone call is the time for you to develop a relationship with them. If you typically do 506(b) funds, then you need to have a substantive relationship with your investors anyway.
* After multiple phone calls or email exchanges, encourage them to book a call with you. Make sure to mention that you won’t be pitching them anything. This call is simply an opportunity for them to learn more about investing with you, and for you to learn more about their financial situation and goals. This nurturing process will give you the chance to make sure it is a symbiotic relationship.
The most important message to take away from this article is that knowing HOW to raise capital is only part of the process. You have to be willing to go out there and DO it. Many investors want to raise money, but don't take action.
Start recording content, put yourself out there and attend more conferences, or reach out to local venues to host your own meetup. Using your own money isn’t scalable, while using other people’s money is. Don’t let fear stop you from achieving your goal of raising millions of dollars in capital for your next deal and ultimately increasing your cash flow.