Posted by A question I get asked a lot is how to get into the property business if you don’t have any money.
The reality is that to actually start any kind of real estate investment career, you need to begin with a sizeable lump of cash for your deposit. The first thing that any investor or bank will want to know is that you have some skin in the game, because it shows you have commitment (not to mention it’ll reduce their overall risk).
If you’re really serious about property, you have to start saving money and building up that deposit. But once you’ve got that foundation sorted, there are specific behaviours you can adopt that will stand you in good stead when it comes to raising money from investors.
Whether you’re operating in Ireland, the UK, the US or elsewhere, these seven principles will help you raise your game as well as raising cash.
Educate yourself and find a mentor
When you’re in the early stages of your career in property development, 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 grow their wealth.
Invest in a paid coaching programme and find a mentor. Having someone more experienced (with all the knowledge they bring) that you can lean on can be invaluable.
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.
When you’re waiting for things to be ‘perfect’ before you dive in, you’re going to be waiting a long time. Remember that “done is better than perfect” and don’t 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 your limiting beliefs get in the way
As a novice, you may find you have a lot of limiting beliefs that are getting in your way. It’s crucial to eliminate your limiting beliefs and not let Imposter Syndrome get in your way.
You could 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, they’ll see it immediately and 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 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. It shows them you’re thinking about them (rather than solely what they can do for you) and that you’re addressing any risks that might arise, such as an increase in interest rates or unexpected construction delays.
Listen more than you talk and build relationships over time
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. Learn how 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.
Ask questions, find out what matters to them.
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.
Set a schedule – even a monthly email saying “everything is on track” is better than silence.
Cultivate the habits for success
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?
Remember, raising money isn’t about being the best salesperson in the room – it’s about being the most prepared, the most thoughtful, and the most trustworthy. Do your homework, build real relationships, and the money will follow.