How to Find Investors for Your Syndicate and Gain Their TrustThe development of the crowdfunding space has been truly revolutionary. Since the introduction of digital crowdfunding roughly one year ago, an ever-increasing portion of real estate projects are financed entirely online. With the right tools in place, you can raise the capital you need for an upcoming project more efficiently than ever before. However, as you’d probably expect, the real estate crowdfunding space also presents its fair share of challenges. Just because you are now allowed to fundraise using these innovative, tech-driven platforms doesn’t mean you’ll always be able to tap into capital markets overnight.
For sponsors (the people who are responsible for organizing the project), two of the most common challenges include finding investors and gaining their trust. There are millions of potential investors out there, but it remains up to you to discover how they are and how you can most effectively communicate with them.
Additionally, even once you have begun a dialogue, you’ll still need to convince them why they should specifically choose to invest with you over the many other available alternatives. Fortunately, there are many ways you can effectively find investors for your syndicate and, eventually, gain their trust. Though many of the strategies we will discuss in this article might take some time before they come to fruition, they have certainly been proven to be effective.
1. Increase Your Social Media PresenceThere are an estimated 4.5 billion social media users in the world and, without a doubt, at least some of the users will be interested in investing in real estate. There are many different platforms that can help you build your brand and attract an active audience including Facebook, LinkedIn, Twitter, YouTube, Instagram, and more. Having a strong social media presence is key to establishing trust.
With quality content, you will be able to convey yourself as a source of authority and as someone who is involved in this industry for the long run, rather than just a one-off project. Posting regular, quality content (that is enriched with links to authoritative sites) will cause people to take your investment proposal more seriously.
2. Develop an E-Mail Marketing CampaignSome people will express enthusiasm for an investment opportunity at first, only to eventually change their minds or forget about the opportunity altogether. If you want people to move from being “interested” investors to “active” investors, you will need to open a consistent, reliable line of communication. E-mail marketing can be very effective. Not only does e-mail provide a platform where you can regularly remind your prospects about the project, but it is also a dynamic medium that can be used to communicate in many different ways. Newsletters, housing reports, investment pitches, and investor checkups can all be done entirely through email (and with tools like SyndicationPro, some of these emails can be automated).
3. Invest in Digital MarketingThere are approximately 5.6 billion Google searches completed every single day. The internet is overwhelmingly the most common place people turn to have their questions about real estate investment answered. Ranking highly on Google for terms and questions connected to your industry will help you attract an interested audience. Search Engine Optimization (SEO) will be one of the most important aspects of your digital marketing strategy. By creating content that answers people’s questions, contains keywords, and is easy to read, you can improve your search engine page rankings (SERP). Over time, an SEO campaign will drive more people to your investment platform.
4. Build an Organic NetworkIn some cases, financing your first real estate project will be easier than financing future projects because you might have a reliable network of family and friends to turn to. But eventually, your “personal well” will run dry, and—if you hope to continue accessing outside capital—you will need to look beyond this network for additional investors. Once you have exhausted your initial network, try getting referrals and seeing if you help your network grow. Eventually, you may be able to create a nearly self-sustaining referral cycle.
5. Utilize Real Estate Investment WebsitesYou know there are interested, qualified investors out there who are looking for new deals—the question you should be asking is, where do these people tend to look first? There are dozens of active real estate investment websites, many of which receive thousands of page visits per day. Listing the property that you are raising money for on these sites can help you gain significantly more attention. Once you have defined the scope of the project, including the expected ROI, you can begin making a broad appeal across many different platforms.
6. Prioritize Previous InvestorsPeople that were willing to invest in a project with you in the past, naturally, will be among the most likely willing to invest in the present—especially if the first project went well and you were able to achieve your desired ROI. These people should be considered “hot leads” at all times and should be made a priority. When communicating with these previous investors, be sure that they know how much you appreciate them and consider them to be an essential component of your real estate syndicate.
7. Find Real Estate Investment ClubsThe SEC describes an investment club as a “group of people who pool their money to invest together. Club members generally study different investments and then make investment decisions together.” Currently, there are at least 2,000 active investment clubs in the United States alone. For many of these clubs, real estate—a stable, highly appreciating asset—will present an extremely lucrative investment opportunity. If you are looking for active investors willing to listen to a pitch, this could be a great place to get started.
8. Use Real Estate Syndication SoftwareReal estate syndication software, such as SyndicationPro, has transformed the ways that capital is raised within the broader real estate industry. A good platform will help make it easy to control investor CRM, automate various processes, manage payments, and manage communications. These platforms can help accelerate the entire fundraising process and help ensure it runs smoothly from start to finish.
By keeping these tips in mind, you can build a broader network of investors and also effectively gain their trust.