Creating a powerful pitch book is such an important aspect of successfully raising money or finding private money that will fund your real estate deals. I hope these tips I share below serves you well in finding private money investors for your real estate investing. Now what is a pitch book? It's your “30 second elevator speech” – it's an investor's “tale of a good deal” – it's bascial your scripted commercial for compelling someone to invest with you on a particular deal or your persuavice speech for getting private money investors to loan you money for a return on their captial.
A pitch book is of little value if it does not excite, ignite, and persuade the intended audience. A pitch book must do all of these to be effective. There are five underlying persuasive elements that a winning pitch book must contain to be effective. A persuasive pitch book that gets results is structured and organized with the frame work that includes 5 essential elements. Without a properly structured and organized pitch book, you will have a hard time gaining interest from private money investors. Creating a poor pitch book will lead to lack luster investor interest. So, here are the 5 essential elements of a winning pitch book that gets results.
5 Essential Elements to Include in Your Pitch Book
1. A pitch book needs to have FOCUS. There must be a central theme which runs throughout your pitch book. Ideally, this central theme or actual real estate potential deal should be your investment strategy to make money for your investors. – That's why they're going to give you their money -That's the focus!
2. The focus of your pitch book must be UNIQUE. What makes your investment strategy different – than everyone else? Why is your strategy to make money…unique?
3. Build your pitch book around a STICKY STORY. A sticky story gets your investment strategy understood and remembered so that it survives the clutter in our brains – and has a lasting impact. Sticky stories get told to others. They take on a form of their own. It makes your investment strategy exciting and interesting so that you get noticed.
4. A pitch book must show CREDITABILITY. Now, creditability is a bit subjective – but – in a flat world, it means you should have some experience or success with your investment strategy. If you have little creditability, there are many workarounds that you can inject into your pitch book.
5. Introduce a PROBLEM and a SOLUTION. Your investment strategy must be the solution to a problem that you've uncovered. Showing that you're a problem solver is a great way to get potential investors attention and interest. Creating a story around a solution to a problem you've uncovered, and your investment opportunity is that solution is a great way to get investors excited. I've got to tell y'all, this is the real key to creating a sticky story that sells.
All pitch books are NOT created equal. There are many important ingredients and strategies that go into creating a winning pitch book. Make sure you include all of these five essential elements into your pitch book so that you have success attracting investors and private money lenders for your deals.
The Ultimate Benefit of Having a Good Pitch
Organizing and sponsoring real estate investment groups are the ultimate situations where you can get or find a “no-down deal with various upfront fees and backend profits on resale of the real estate deal”. This may sound too good to be true, but most successful business people, like Donald Trump, are using this strategy today!
The sponsor, general partner, or organizer of the real estate investment group control investments without actually owning them. They use super leverage using Other People's Money (OPM) by pooling money from private money investors to form investment groups that buy various types of real estate investments.
Typically, the sponsor (you the real estate investor) invests little to no money in the investment group “creating an infinite return” for themselves. With the private money investors funding the entire investment, the sponsor (you) – through exercising their adroit management and savvy investing skills can earn managerial fees, organizational fees, and commissions for their professional efforts on behalf of the partnership or real estate transactional deal. In addition, the real estate investor (sponsor/deal organizer) gets a sizeable profit share (20-50%) as an incentive bonus upon resale of the property.
Let me review:
1. The real estate investor or sponsor organizes the group investment without putting his personal funds into it.
2. The sponsor controls practically 100% of the direction of the investment.
3. The sponsor can earn numerous types of fees along the way.
4. The sponsor is eligible to receive from 20- 50% of the net profits on resale.
The rate of return for an investment of zero dollars is INFINITY. That my friend, is super leverage; and it is alive and well, working for many small and larger real estate investors around the country. Make a note here on “wealth building” techniques: The road to wealth is in the CONTROL, not necessarily in the OWNERSHIP.
I look forward to helping you reach for the stars with your real estate investing and best of luck with all of your “no moneydown deals”!