Here are 8 powerful marketing tools for recruiting private money to fund real estate investments.
If you’ve been flipping houses for any length of time you’ve probably learned that borrowing money from private lenders is the best way to fund real estate investments. But the big questions are how do you find these lenders? Then, how do you approach them? How do you get your point across? And – bottom line – how do you get them to lend you the money you need?
Know the Laws
First of all, before you do another thing, make sure you know the laws that govern how you approach private lenders. Federal and state regulators take this matter very seriously, so be sure you are in compliance. The last thing you need is to inadvertently violate federal and state laws. Having said that, please read on to learn how some of the nation’s top real estate pros market to private lenders.
- Your Message – No matter what method you use to reach out to private lenders, make sure your message is consistent. Remember, first and foremost, to keep your message short and sweet. You don’t want to bore your potential lender before he or she even sees your deal. Keep it simple. For example: “13% fixed return backed by real estate. Become a Passive Investor. Be the Bank. Beat the Market.”
This message is short, to the point, and pushes some important buttons the independent private lender likes to have pushed. You’re communicating that they don’t have to do any heavy lifting, they can be in control, and they can beat the stock market.All of these things resonate with the typical real estate investor. These people are usually very independent-minded and want to take control of their investments. Perhaps most important, they want to understand what the investment is all about and how it works. Like the rest of us, most of them don’t have a clue about how the stock market really works, but they do understand how real estate works. They know about buying and selling property.
- Postcards – Postcards should be sent out to your existing private lenders and your database of potential investors. The postcard can focus on a press release and the return you are paying. It should have the disclaimer saying that your company is operating under a 506(c) registration, and the words, “for accredited investors only”. Note: You can also send out a monthly newsletter that accomplishes the same thing as the postcard.
- Website and Facebook PPC – Your company website should have a prominent section focusing on attracting the private investor, saying things like the following:“You’ll find investment success and confidence as a private funding partner. Download your free digital book, ‘How to Earn 11% Fixed Return and Double Your Money Every 6.5 Years’”. You should try to have an interesting free giveaway, like an ebook, that will be of interest to the private investor and compel them to take the next step. All of this should be built into your website.
Facebook allows you to segment by area, by age, by city and by interests. You want to send your Facebook PPC (Pay Per Click) traffic to the website and get an ‘Opt-In’ there. Once people opt into the site you can direct them onto an auto-responder, which takes them to a survey that asks for their phone number. From there they become a lead for your sales funnel.
- Sales Funnel – Create a sales funnel to handle the leads coming in from your marketing efforts. The ideal sales funnel is staffed with a senior investment advisor and an investment coordinator. The investment coordinator handles administrative work and sets up phone call appointments on behalf of the senior investment advisor. The investment advisor handles inside sales, small groups, webinars, and one-on-one phone calls. You could also have a senior investment advisor handling seminars and large groups.The postcards and the Facebook PPC generate interested people who want to meet with an investment advisor. Your investment coordinator will book an appointment for the advisor. The advisor handles webinars, meetings and small groups, one-on-one phone calls, and presents the same pitch deck over and over again. This could be happening in one form or another several times a day.
The senior investment advisor will attend large groups, industry conferences, speak on stages, talk about the 506(c) registration, and speak at REA clubs, and even national REA groups.
These are ideal positions for staffing and properly running your Sales Funnel.
- Agent-Partner Program – Another program that can help you raise money is the Agent-Partner Program. The term “Agent” is a legal term for someone who represents the company and is compensated by the company. The Agent-Partner Program involves training sessions for groups of around 20 on how to raise money, how to handle the 506(c) registration, and other related subjects.
- Funding Opportunity Sheets – You can also email out Funding Opportunity Sheets. These are email broadcasts about deals that you’re funding. The fact is, most of the time the deals are already funded, but you can still send out the sheets to all your potential funding partners so they can see the kind of deals you’re doing. They see the purchase price, the repairs, the after repaired value, the pictures, etc. The idea is to expose them to the various funding opportunities that are happening, even if they’re already funded. Remember, it’s all about exposure.
- Funding Opportunity Webinars – You can periodically hold Funding Opportunity Webinars. Every week or every other week you can send out email broadcasts for a webinar registration. On that webinar you can have a pitch deck of deals you want to fund. Or, if all the deals are already spoken for, you just want to raise awareness to your deals and more general capital. You can show deals that are in your pipeline that are closing in the next 30 to 60 days. Many of these deals may already be funded, but they show people the kinds of deals for which you want funding.
- Seminars – You can also do seminars geared to the private lender. Start by buying a list of CD (Certificate of Deposit) and IRA (Individual Retirement Account) owners. Make sure the list is of people 55 years old and older. Then invite those people to a private funding seminar, during which you walk them through your deals and teach them about private lending.
If you’re just starting out in the real estate business, or even if you’ve been at it for a while, you may not be ready to implement all eight of these marketing tools at once. But the good news is you can start off with one or two and slowly build up. For example, you can start be developing your message, then move on to mailing out postcards. From there you can beef up your website and get your company’s name on Facebook and other social media. The idea is to slowly but steadily implement all of these tools to generate investment capital, the lifeblood of any real estate investment business.