A question I get asked a lot is how to get into the property business without any money. It’s a difficult thing for people at the outset, but really, to actually start any kind of real estate investment career, you have to begin with a sizeable lump of cash: you can’t really pass go without it.
There are some people out there who say they did it all with zero cash down – don’t get caught up trying to be that person. While it may be true, I’d be sceptical. It is possible but its rare and you have to find a seller who is willing to go against conventional wisdom.
If you want to be realistic about it, you have to start saving money and building up a deposit. There are a number of ways you can do this but remember that it’s going to be difficult to move forward in this game without having your own money: the first thing that any investor, any bank, will want to know is that you have some skin in the game.
That said, whichever property market you’re in, whether it’s in Ireland, the UK, the US or elsewhere, there are behaviours you can adopt that will stand you in good stead when it comes to raising money from property investors. Here are some of my top tips:
Educate yourself and find a mentor
When you’re in the early stages of your career in property investment, knowing what you’re doing is key! Build your education so you can be confident when you’re taking money from others that you’re actually going to be able to pay it back and grow their wealth.
Invest in a paid coaching programme and find a mentor – having someone more experienced that you can lean on can be invaluable. Without one you’re likely to make a mistake and end up paying out a lot more than the cost of the coaching.
Don’t wait for the perfect time to get started…
… Because there isn’t one! Be confident and put yourself out there. If you know your stuff, then it’s time to stop worrying and get started.
If you’re waiting for things to be ‘perfect’ before you dive in, then you’re going to be waiting a long time. Remember that “done is better than perfect” and try not to overthink things – you will always improve through iteration. The more deals you work on, the better and more confident you’ll become.
Don’t let self limiting beliefs get in the way
When you’re starting out, you may find you have a lot of self limiting beliefs holding you back. It’s crucial to eliminate those thoughts and not let Imposter Syndrome get in your way.
You may be asking yourself why people would want to invest with you? It’s because you’ve done your homework and you know what you’re doing! If you feel uncomfortable, that can be a good thing: it means you’re growing. Get used to the idea of stepping outside of your comfort zone.
Be an expert, not a salesman
When you’re talking to prospective investors, it’s not necessarily what you say, but instead the way you say it. It’s really important that you don’t pitch to people, but instead that you educate them. If it’s the right deal for the right person, it’s like a lightbulb will go off above their heads and they’ll want to get involved.
In terms of how you talk to people, sometimes showing is better than telling: tell them why you like the asset, why you like the deal, but also map things out for them. Arrange webinars, meetings and walkthroughs so they can get a proper idea and feeling of how a property or development will look.
Make sure there’s context in your communication with each person – show them you’re thinking about them and that you’re addressing any risks that might arise, such as an increase in interest rates.
When you’re meeting someone for the first time, listen more than you talk – everyone has different goals so really try to understand what their intentions and aims are. Then you can pair the right deal with the right person.
Know (or learn) how to give an effective presentation. Understand what people want to hear and at what level of detail. Be able to read a room and adjust what you’re saying for your audience as necessary. Meet the buyer where they are and tell them what they want to hear, not what you want to say.
Don’t rush things
Don’t expect people to make high-value decisions quickly: build relationships over time and let a deal warm up naturally – don’t start talking to someone when a deal needs to be closed the following week!
It’s vital to build rapport with new contacts or give people you already know time to view you in a different light. For example, if your friend from college (and now potential investor) knew you when you were young and perhaps less responsible– now they need time to see you as a serious custodian of their money!
Make sure everyone is comfortable with the pace of the engagement.
Communication is key!
A lack of communications with your investors can sink a deal, so stay in contact with them, whether there are developments to make them aware of or not.
You might think that no news is good news, but when people are left to wonder what’s going on, their thoughts will tend towards the negative, so give them regular updates. Don’t let a good relationship break down due to something so simple.
Cultivate the habits for success – be strategic and intentional
One of the most important things you can do to improve your dealings with investors is to be strategic. Cultivate rituals and schedules so that you’re always focusing on the right thing.
Schedule your day thoughtfully and learn the difference between busy and productive. You can spend a whole day dealing with your inbox and getting nothing done, so make sure you’re always doing things to keep your projects moving.
Dedicate time to what needs to get done, block your meetings together, be strategic about your business. What’s going to make you most effective?
If you’d like to hear more on this topic, take a listen to episode 112 of the podcast, “How to Raise Money from Investors” (link below) it goes into more detail about how to raise your game when you’re trying to raise money. Good luck!