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Simple Ways To Raise Private Capital
It’s good to be back in Austin. I was out of Austin and was in San Diego for the Magnify Your Wealth Summit and Aaron Young’s Inner Circle. Big shout-out to Aaron Young. I’m always excited to hang with him, Michelle, Meghan Cole, Brent Buscay, Kevin Day and the whole troop that runs the Laughlin Associates. They’re a great crew and I enjoyed hanging out with them. Great group of people. It’s great to see Paul Cooper, Lin Mitchell, just to name a few of our students at the event. That’s a powerful and magnifying event to help you with their assets and help you with your asset protection. Laughlin Associates is a proud sponsor here with us and we’re a proud sponsor of them.
Aaron Young’s Inner Circle
When you leave the office for a couple of days, I always worry, “Is everything fine?” I may not be as fast on my emails or my voicemails but things still get done. It was nice to come back and spend a little time brainstorming some things. We have great things that we’re working on that we’re putting into place for 2019. I was talking with some people and it’s amazing. We have so many great entrepreneurs. One of the things that Aaron does with his two-day Inner Circle is he likes to get everybody in a couple of round circles and going person by person what their biggest hurdles are, what are their biggest difficulties are, what are they struggling with and trying to have everybody else in the group or in a circle help them out with that. It’s valuable to have a group like that where you can reach out to. It’s a safe situation where people are sharing some of their hurdles, some of their difficulties and then also gaining insight and wisdom from those that are entrepreneurs giving them ideas how to make something done. Some of the things that are simple.
One person was looking for some help finding the right type of employees for her trucking company. People that were owner or operators, a simple Google search then, “Here’s a list.” Other people are dealing with hiring and firing. Other people are doing raising capital. Other people are trying to launch a product so they need help with marketing. That’s where I came in as the marketing expert and some real estate savviness to everybody and their branding aspect and how to help them brand themselves and stand out from the competition. Let’s face it, if you aren’t used to marketing or aren’t used to branding yourself, when you leave a job to launch something yourself, it’s downright difficult sometimes.
Honestly, the reason I bring up branding is that it ties into your ability as a real estate entrepreneur to be able to raise capital or to stand out from the audience. It is an important aspect of what you’re doing in your branding and your marketing like we do here with the green and the logo of the podcast and with the logo in the corner. If you’re looking for more information, text the word Notes to 7200 to learn more about note investing and it helps you get branded into this. Our brand helps you get signed to get more information. I crack up a little bit because I was starting to get messages and emails and people are like, “Is Scott okay?” because I didn’t do an episode. I did one episode in San Diego because I was committed to being there with Aaron and diving in and sharing my wisdom and knowledge to everybody who was there. It’s good to back. It’s great to see Aaron Young, Ingrid, with the Quest IRA crew as well and hang with them.
If you’re raising capital, you’re looking to raise capital for your deals, I know so many people get excited about the deal aspect. Good deals raise capital. It’s a truth, it’s a fact. There are some other ways to raise capital. That’s the subject of Note Night in America is some of the ways to raise private capital. We’ll go through that but I’m going to touch on that a little bit in this episode. You can check that episode if you’re listening to iTunes, Stitcher, Spotify. If you want to listen to that episode, just go to Note Night in America podcast and download that episode.
There are simple ways to raise capital. I was talking with investors about it and I know it seems like common sense to me because I do it on a regular basis and it seems like Greek or Latin to others because they’ve never done it before. I was talking to these two ladies that were looking to raise some capital. I said, “What are you doing?” They’re like, “We’ve got a fund for accredited investors only.” I said, “Who have you raised capital from?” “So far friends and family.” I’m like, “Have you market?” “Partners said we can’t do that.” I said, “You can do it. Let’s talk about some of the easiest ways for you to raise capital.” I shared with them very simple ways like jumping on the county records and looking for people who have used their self-directed IRA before. Many of you have heard me talk about that before in previous coaching call. It’s the easiest way to find IRA investors who have pulled the trigger in the county and use their IRA. Often, what do you have in common with them? You’re both real estate investors. They’ve got money and they pull the trigger. They’re also a little bit smarter because the fact is they have a self-directed IRA, whether either through Quest or some other custodian.
There are some sources when I brought up a couple of websites, “I’ve never heard of that before,” which I can understand. I brought up this one, the easiest ways to raise capital. This is one of the most valuable ways to raise capital. Myself have done it. A couple of my guests and students like Adam Adams, Wayne Snell and a few others have done it as well. It’s a very easy way to identify people. What you do is you go to BiggerPockets.com. You’ve got to sign up there. You pay for this website. The membership is $99. Just having the free version doesn’t help you in any form. Type in the keywords SDIRA401K. You put those keywords in there and it’s simple. You’ll start getting notices of people who have responded to that. People will put in their comments there and will post them, “I’ve got $50,000 in IRA. I have a 401(k) rolling over. What should I do with it?” I laugh because I’m like, “You’re literally paying a big target on your chest to those investors.” Giving the alerts is the first thing, but it doesn’t help you unless you take it one step further.
The biggest thing that I will tell you is to make sure that you put some due diligence package or some more information about your business. There are some good things that I would highly recommend you do when you reach out to these individuals. I wouldn’t necessarily go on and reply to their comment and give them the whole idea of what you can do. What I would simply do is say, “I’ve got some options for you. I thought about maybe non-performing notes.” Send them a private message. This is a cool thing that you’ll like. It’s very easy to do. You take a short video talking about some of the projects you’ve worked on and some of the projects you’ve completed. It doesn’t always have to be notes. It could be fix and flips. It could be some rentals that you’ve done. Put something together that’s easy enough to talk about who you are as a real estate investor.
You may be doing a short PowerPoint, a quick 30-minute of, “Here’s what we do. Here’s what Good Journey Investments is all about. Here’s what Straight Arrow Investments is all about. Here are some products that we’ve done that we’re all about. Here’s what we’re doing with OPM, with other people’s money. Let us help put your money to work for you.” The beautiful thing about that is it doesn’t have to be complicated. You don’t have to have a long discussion with them. The idea is, “Maybe you want to think about doing nonperforming notes or something like that. I’m going to send you a private message talking about our business.” The reason I recommend this because I’ve done this before, still do it, is that some of our most successful students have done this and they’ve raised enough capital from doing this on a regular basis to help them.
They’re not marketing the market for money anymore. They’re comfortable, they’ve done enough deals, they’re living gracefully off the deals. They’re not very aggressive on new deals because they’ve done such a great job raising capital and they’ve got cashflow. They’re at a great comfort level, which is phenomenal, waiting for the right deals to come along, which was what everybody roots for. I guarantee if you do this, put a little Zoom webinar, BeLive just talking about what you do, if you’re doing like GoToWebinar or Zoom to record a quick little PowerPoint presentation, ten or twenty slides about some of your deals, then you’re rock and rolling.
We had Sal Buscemi on talking about raising private capital for commercial lending. He provided a great PowerPoint deck to help you with the pitching. It was like a fill-in-the-gap that you can use as a guide. I would use something very similar to that and use that to raise your capital and use that as your base point ten slides, fifteen, twenty slides max about what your businesses and some of the deals that you’re doing and what you’re doing to in notes business. This is simple. You film it once or twice and throw it out there. Second time you film it, you record it, you’re going to be a lot better than you do the first time. What you don’t want to do is be doing “Uhm” throughout your presentation. Film that once, go back and watch it and you pick up a lot of great pointers about what you do. Take notes on your presentation because that’s the only way you’re going to get better.
One reason I have been successful at raising a lot of capital for doing presentations and speaking is because I’ve done it hundreds of times. I’ve gone on a thousand plus of speaking and that’s not only publicly, but also group settings like webinars and podcasts. The more you get to talk about your business, the more comfortable you’ll be at it as well. That only comes from experience, failing and bombing. Trust me, there have been times I have bombed speaking or bombed on webinars, but it was still great practice. There were times early on when I did a webinar and there might be five people on it. I said, “I’ve got to look at this as an opportunity to hone my craft.” One of the things I did early on was I was at an event in San Francisco, a big summit of twenty people there. I was disappointed. There were four people in my workshop. I was the big workshop speaking in that weekend at that expo, four people. I brought in some vendors and they sat down and heard me speak for the first time. I had about eight to ten people in the room. We did the smart thing and live streamed it as well. That live stream got to 400 people.
I used that opportunity to spread it out. I raised capital from that and I get some students from that. The thing I want to get at is I see people not doing a lot of this. I see some people doing it and they’ve done it well and they raise capital. What is frustrating is when people say, “I can’t raise capital.” You’re out sharing your message, sharing your story, sharing who you are and what your message is, what your drive is, what is your why is, why are you doing what you do, why are you so passionate about it and it will drive traffic. It will drive capital. It will ultimately drive deals to you as well from other people that surround you.
We have a question, “Can you clarify the programs you used to integrate slideshows with your live recorded video? I’m looking at Zoom website and I don’t see anything like that.” What you have to do is if you get Zoom, you have to add the webinar feature to it. I would recommend that what you do is go to Zoom.us, pick up the phone and call them. You don’t need the huge version of Zoom because they have a lot of packages that can be very expensive if you’re doing tens of thousands of people. The webinar aspect of things, you want to add that to your Zoom.us as an add-on to it. Just give them a phone call. They can walk you right through it. They have a great customer service over at Zoom.
We have another question, “I like to partner with investors higher up the food chain that can buy larger pools of funds. What’s the best way to do it?” Just talk to people and maybe not wanting too much. I’ve had some investors call me that people have called them saying, “I want 15% or 20% of their money, the return of investment of their money.” I’m like, “That’s fine. You’re not for me then.” It’s also important to keep in mind where the market is at. Especially those who are going to do the heavy lifting for you and you’re just being a passive investor, making 10% to 12%, maybe 15% is not that bad. If that’s the case, if you’re a passive investor, you may just as well look at performing notes in a fifteen yield. Unless you do a lot of the work yourself and do a lot of heavy lifting, if you’re a passive investor for the most part, 12% is a pretty good return of investment that you’re not going to find in most places. You may have peaks and valleys. A lot of people are like, “I’m making 30% return on my seconds.” “That’s great. When was the last time you bought something?” “Six months ago.” That’s the thing to keep in mind is where is the market at. I see that from other people. They’re like, “If you’re not going to do the heavy lifting, a passive return, money’s cheap, there’s a lot of capital out there.” Somebody comes to me and says, “I want 20% return plus 20% of the profits,” I’m like, “There’s no reason to talk. You’re too expensive. I can find a lot cheaper money in the market versus having to chain myself to a huge albatross on the aspects of things.” Hopefully, that makes sense.
The best thing you can do if you Zoom or GoToWebinar, take some time, take a PowerPoint presentation and record it. Throw it up on YouTube. Throw it up on Vimeo if you use Vimeo. Throw it up on Facebook. Save it somewhere where you can share that video over and over again to people that mention that they’re looking for something. You can use the same process on LinkedIn. There are a lot of LinkedIn groups that have some large members of commercial investing, note investing or distressed assets or private investors list. Take the time to go ahead and do the same thing. Leave a comment there and maybe upload your video to it. LinkedIn groups are a little bit less aggressive, unlike BiggerPockets. If you’re promoting your business in BiggerPockets or anything like that, they’re going to shut you down or delete that message or delete that post. If you send it as via private message, you’ll be fine. You can’t share the same message with more than twelve people in one day otherwise they’ll flag you for spamming and you don’t want to do that.
What’s another thing to do as well is take that same presentation and go to some different Meetup groups, “I’ve got some deals I’m working on. I would love to talk with you if anybody’s interested in putting their money to work on some short-term.” Short-term is twelve to 24 months. We’re not talking 30 years like a lot of people initially thinking of the note business. Twelve to 24 months is a plenty of time to get some deals done. Also it’s going to make some great returns for you and your investors as well, whether it’s passive or aggressive.
Jeffery Wolf shared a good nugget, “I’ve had success posting in apartment investor groups. That is a golden nugget. What’s so great about apartment investment groups? A lot of apartment investors understand that there is not a lot of value added to that stuff. There are a lot of people overpaying apartments right now and they don’t want to do that. They still need a capital to invest and still want to be in a passive investment.
Those are a couple of good ideas there for you. It all starts with you sharing your message. I’m happier doing it one time and sharing it with thousands of people versus doing one-on-one. The idea of sharing it once to a thousand people and that leading to one-on-one conversations, if they’re interested versus going one to a thousand conversations and never having an effective time in finding investors that can do something for you. We are working on some stuff there for. I want to give a big shout-out to all our fans. Very surprisingly, we’ve found fans in other parts of the country. I have somebody on a plane recognize me. They listen to the show, which is funny. That was great.
We have decided to come up with an ambassador program for our brand ambassadors, those that love what we do that want to be a bigger part, who want to share their love and even make a little bit of dough along the way. We’ll be announcing a new brand ambassador program here, so stay tuned. Check your emails. We’ll be announcing some cool stuff as we finalize those things here. If you’re interested in getting more information on the webinar, text the word Night to 7200 or text Notes to 7200. You can get registered that way as well. It’s about raising private capital and some creative ways for you. It’s pretty easy to do. Go out and make something happen. We’ll see you all at the top.
- Magnify Your Wealth Summit
- Laughlin Associates
- Note Night in America on iTunes
- Note Night in America on Stitcher
- Note Night in America
- Sal Buscemi – previous episode