A lot of people ask me this and it’s definitely a hot topic and something you definitely want to make sure that you do appropriately and legally.

The last thing you want is the Securities And Exchange Commission coming after you.

If you have never heard of them… you can learn here: SEC website

In the meantime… do the following and you’ll be ok:

 

Step 1- Start networking and telling people what you are doing and that you’re pumped about it.

  • Family & friends
  • Your sphere of influence (doctors, dentists, attorneys, chiropractors, any business professional)
  • Go to and join your local REIA
  • Join and/or start a meetup
  • Join the Chamber of Commerce and the Rotary Club
  • Attend charity events, dinners, etc.
  • Linked-in, Facebook, etc.
  • Some people do webinars (advanced)
  • Have seminars (advanced)

 

Never judge a book by it’s cover because you never know where that $ is going to come from, which is why you want to tell as many people as possible about your apartment buying business.

I like to keep things simple and down-to-earth, yet professional.  Something like…

(Insert Elevator Pitch)

“I work with real estate investors that buy apartment buildings”

(The Other Person Replies)

“Oh wow… really?  Where?  What size… Like a 2-3 family??”

(Your Response)

“No… bigger ones… like 75+ units… down South and in the Midwest…”

(The conversation will go in a variety of directions at this point.  If you take anything at all away from this blog post… let it be Step 2)

 

Step 2- Develop the relationship first and foremost.

NEVER MAKE AN OFFER TO A STRANGER (eg. “I’ll give you 10% on your money, etc.).

Collect business cards first.  You risk the Securities & Exchange Commission coming after you if you do general solicitations.

Meet people first, do deals later.

 

Step 3- Meet later for coffee, Skype call or lunch, etc

You need to evaluate the person’s risk tolerance (I have a script you can use for this).

I would give it to you here… but I don’t want to overwhelm you with information.

Call me and I’ll go over it with you.

 

Step 4- Based on the info you gather from Step 3, you can THEN inform your potential investors about deals you have.

You will typically be making private 1-on-1 presentations to people.  You could send out a flyer to an email database of people that you have interviewed, as well.

Let me know when you are ready to start networking… We can role play and I can help you craft & fine-tune your elevator pitch.

 

Here are some questions that people have been asking me recently about raising private money that I thought you may like to know the answers to:

“As a syndicator when you first started in multi-family what would you say were your biggest challenges when seeking to raise capital from investors?”

The biggest challenges… hands down… when starting out are:

  1. Establishing credibility, so people trust you
  2. Having a deal that gets potential investors excited.  A mediocre deal typically doesn’t cut it.

 

Did you hold luncheons?”

No, but you could if you wanted to.  I typically did 1-on-1 meetings at a coffee shop.

 

“Did you develop a network of contacts from previous relationships?”

Absolutely.

When you treat someone right for the first deal, they have no problem investing with you again and again… and they tell their friends.  Many of your investors will be repeat business and referrals.

 

“Did you raise all your capital before you did your first deal?”  

No, but you need to have some money raised before you go to contract, so you can put down earnest money and cover other miscellaneous expenses, such as attorney fees and inspections.

 

Did you find this information helpful?

 

What would you like to know more about with respect to raising $ and buying apartments?

 

Let me know!  

Chris