The biggest mistakes new real estate investors and syndicators make is not having a ready pool of investors to approach before looking for a deal to buy. Are you making this mistake? I can't tell you how many times new syndicators chase properties all over the place, like chasing rabbits.
They get tired and overpay for a property just to get a deal under contract. Then they scramble to try and find investors for a deal that may not really be that exciting. BEFORE you start looking for a deal to buy, you must first start building your pool of potential investors. Why? Because if you start approaching investors AFTER you find a deal to buy, you will be under tremendous pressure to find investors in a short time period.
Most likely, you'll lose the deal; lose confidence of others, and seriously damage your reputation because you couldn't raise enough money from investors to get the deal closed. Start building your investor pool BEFORE you find a property to buy. Here's an easy to follow 4-step process you can follow that will help you build your pool of ready investors.
4-Step Process to Building Your Pool of Investors
1. Create Your Pitch Book:
Create a unique investment strategy to capitalize on today's great buying opportunity. What's your strategy to make money investing in real estate? Package your plan up in a short 8 – 12 page pitch book.
2. Build Your Investor list:
Make a list of potential people that may have an interest in investing in real estate. The best place to start is friends and family. Here are some other places to find investors for your list:
Business Associates, Accountants and Financial Planners, Attorneys and Doctors , Property Owners, and REIA club members.
This list will be your starting point. Make sure you ask people on your list if they know anyone else that might have an interest in investing in real estate. You'll be amazed at how many people will refer others.
3. Conduct Investor Meetings:
Make breakfast or lunch meetings with people on your list. Review your pitch book during your meeting and determine if there is interest. You're not selling anything. The most important element coming out of these meetings are new relationships.
4. Build Your Investor Database:
Potential investors who have an interest in your plan are added to your database. Your goal is to build as many potential new investors in your database as possible. Stay in contact with potential investors in your database by sending them articles, stories, stats, and so forth relative to real estate investing and your investment strategy.
Follow the my Value Hound 4-step process so that you get your real estate investing business and syndications off to the right start. Build your pool of investors before looking for a deal to buy. Start with step one and work your way through step four. Follow this process and you'll have tremendous confidence when you finally start looking for a real estate investing deal to buy.