The last post focused on the top two Fatal Mistakes that investors make when they’re on the prowl for private money. I continue here with Fatal Mistakes #3 and #4.
Private Money Mistake #3: The Complete Lack of Networking
I can hear the shouts right now – “HEY! I network – I attend three REIA meetings per month and I get together with my real estate buddies a couple of more times per month!!”.
Good for you. But to be blunt, when we’re talking about raising large sums of private money, spending time around other real estate investors is not “networking”. In fact, if your goal is private money, then hanging out with other real estate investors is probably the biggest waste of time possible.
Tell me this – when was the last time you raised a single dollar of private money from another real estate investor?
Never? That’s what I thought. I haven’t either.
So while REIA meetings have their uses when they’re not pitching the latest fly-in fly-out guru crap, forget about them in your quest to expand your circle to find new potential private investors.
The trick is finding places where potential private investors hang out, then go hang out there yourself and meet and get to know some new people. But how do you discover where these potential private investors hang out? You need to start by creating a profile of your perfect private investor, then figuring out where they spend their time outside of work. That’s actually the easy part!
Have you done either of those things yet? If not, I suggest that you do. If for no other reason that nobody else is doing it, so you’ll start to separate yourself from the crowd of people looking for private money.
Private Money Mistake #4: No Third Party Credibility in Your Niche
What are you doing to get visible on the internet? To create a buzz about your business? To create the aura that you’re the “go-to” guy in your niche in your geographic area?
When I talked with my private investors and asked them how they came to the decision to give me money, every one of them told me that they had researched me on the internet and talked to others in the community, and in doing so they had come across my blog, or found my book on Amazon.com, or had seen the write-ups on me in Smart Money Magazine and CNNMoney.com, or had seen the write up on me in the local paper.
You need to be vitally aware that one of the very first things that someone is going to do after you ask them for money is google you and ask around.
Are you going to appear? I imagine you probably would, unless you happen to have an ultra common name I suppose.
But the more important question though is – are you going to appear with anything relevant to your real estate niche? Using myself as an example, I can confidently say that within 30 seconds of googling me a complete stranger would know that I’m an experienced cash flow real estate investor presently focusing on suburban apartment buildings. In addition, if the same people asked about me around the neighborhood – guess what? They’d hear exactly the same thing about me.
Because that’s what I write about in my blog, that’s what I wrote a book about, that’s what the Smart Money Magazine and CNNMoney.com write-ups are about, that’s what all the pictures and videos that I post are about, and that’s what I talk to my neighbors and friends about.
Are you that identified with your niche?
Not doing this is a huge mistake by real estate investors, because they miss a great opportunity to stand out from the rest of the crowd looking for private money. The good news about this is that while it will take some time, effort, and energy on your part to make this happen, it will take far less than you think.
Because virtually nobody else is doing it.