EP 494 – The Private Partner Formula with Dave Dubeau

NCS 494 | Attracting Investors

NCS 494 | Attracting Investors

 

The old saying “Find a good deal and the money will find you” proves to be the opposite for real estate entrepreneur Dave Dubeau. After losing a great deal due to a lack of investors and capital, Dave discovered a clever way to get investors to chase him instead of the other way around. Counter to what we have learned over and over again about raising capital, Dave breaks down the formula to attract investors and partners so you can turn things around and stop desperately chasing after people. You will surely find a number of great nuggets in this episode with Scott Carson and Dave and they discuss marketing, networking, doing presentations, and putting out content.

Listen to the podcast here:

The Private Partner Formula with Dave Dubeau

We’ve got a special guest join us from north of the border who knows a thing or two about working with investors and knocking some things out. Our good friend Dave Dubeau is joining us. For those who don’t know who Dave is, he’s a real estate entrepreneur up in Canada, who learned the hard way. The old saying, “Find a good deal, the money will find you” is horse hooey. After losing a great deal due to lack of investors and capital, Dave discovered a clever way to get investors to chase him, after him about his deals instead of the other way around. We are excited to hear about this horse hooey strategy from north of the border, Dave.

Thank you very much for having me on the show. I appreciate it. It’s a real pleasure. What I’m going to be sharing with your audience is how to avoid all the horse hooey of how most people have heard about raising capital. That’s my take on it. Most of what we’ve heard and learned about raising capital, dialing for dollars, turning every conversation into a real estate conversation, networking, schmoozing, cold calling, spamming everybody we know about our deals. That is the exact opposite of what we should be doing because I’ve tried all that stuff and failed miserably at it. I had to find a different way.

You’ve been investing for a few years. Do you want to share with our audience before we dive into some of those nuggets, your background and your focus these days?

My first real estate investment one was way back when I was twelve years old. My mother was quite a successful real estate entrepreneur in her own right. Even though she was a full-time teacher, she was a single mom, she’s still built up a portfolio of over 50 doors. I remember when I was twelve, she and my older brother were working on a duplex deal. They’re talking about it around the kitchen table all the time. I got excited and I said, “I’d like to be part of this.” I’d saved up $200 from whatever. They say, “You can invest.” They affectionately said, “I got to own the garbage stoop of that property.” That was my first foray into real estate.

Fast forward, next fooling around with it would have been in the early 2000s. I was living down in San José, Costa Rica. I spent ten years living in Mexico and Central America, most of that time in Costa Rica. I stumbled across a couple of foreclosure deals down there, believe it or not, and did those. Those were quite lucrative. My wife, Susy and I, we had two little kids. We thought Costa Rica is great, but you have a face-to-face, white guy in Latin America whether you got money or not, people assume you do. There’s a little risk of being kidnapped, which we don’t have a big risk of here in Canada. We decided it’d probably be a better idea if we raised the kids in Canada. In 2003, we left everything quite a nice lifestyle, nice business down there, gardeners, maids, all that stuff and moved back to Canada to start all over again from scratch.

We moved the family into a crappy little rental place on a not so good side of town and started all over again. That’s when I got into a quick turn real estate investing ala Ron LeGrand. I remember seeing one of those infomercials sent away for it. I got the course. I had to Canadianize it because again that’s all American. It’s pretty similar in Canada, but a few little tweaks here and there. I did eighteen deals in eighteen months. That was my initial claim to fame with that. That was all low money down, no money down type deals. I didn’t need investors. I didn’t even understand the concept of using other people’s money.

I took a hiatus from that. I started working in marketing, which is my background. I helped the Canadian rich dad grow his company and eventually raised over $200 million for investment projects that way. I jumped back into real estate in 2010 focusing on lease options. I self-financed my first few deals because we were doing tenant first. We’d buy people property and rent-to-own it to them for two or three years and close out on the deal. Like most people, I self-financed my first few properties. I ran out of cash, ran out of credit and that’s where I’m like, “Find a good deal and the money will find you.” Have you ever heard of that one, Scott?

I said it on a webinar.

That’s the one I found out was horse hooey. If you’ve already got a group of prospective investors lined up, then yes, that’s true. If you don’t, if you’re starting with a good deal, starting from scratch, trying to raise capital under a time crunch, that’s what can lead to a disaster. I started dialing for dollars. I picked up the phone and I called somebody, “No thanks. I’m not Interested.” I called again, “No, thanks. I’m not interested,” again and again. In total, I did about five cold calls, to be perfectly frank with you, Scott. I have a fragile ego. After five hard noes, I pouted and quit cold calling, which I find a lot of people do because not everybody is designed as a closer. We see these guys. We see Wall Street. We see Wolf of Wall Street. We see Glengarry Glen Ross, all these sales-type of guys. Most people are not that guy. They can only take so much rejection and they quit and that turned out to be me.

I heard, “Turn every conversation into a real estate conversation.” I ran out and I was doing networking and all this stuff. I’ve got a bunch of weird looks because I was trying my 30-second elevator pitch on people and all this stuff that you hear you’re supposed to do, it didn’t work. I was running out of time. I had to get an extension on this deal and I came up with a brilliant idea. I said, “Why don’t I email everybody I know with a little deal overview? I’m sure I’ll shake the tree and raise some money that way.” That I did. I emailed everybody I knew. I got excited because I saw all these replies coming back until I started reading the replies. The gist of it was, “Dave, I haven’t heard from you in ten or fifteen years and the first thing that comes out is you’re looking for money for deals. Bugger off.”

That was pretty much the gist of it. Bottom line, I lost that deal. I had to return my clients’ money to them. It was a disaster. I got mud on my face. I pissed everybody off that was involved in that deal. I vowed right then and there, “I never want to be in that position where I’m desperately scrambling for the cash. I never want to be there again.” That’s when I came up with, I said, “Why don’t I apply marketing to finding investors and raising capital? I’ve done it all these different businesses. Why don’t we turn things around instead of me desperately chasing after people? What if we create some marketing and get them reaching out to me interested in my deals instead of me desperately pushing my deals on them?”

That’s the smart thing of doing things is using the tools that are available to this day. Everybody struck out in a multitude of ways like you said. We all come into the real estate messaging space like a new puppy, all excited and we do a variety of different things. You can become that annoying person who’s asking everybody about real estate. I’ve got some buddies that I went to college where they used it like, “If I asked twenty girls, I’m going to be kissing one of them by the end of the evening.” We’ve all sent emails after a database. If you’ve never done it before, there’s a science to reach out. A lot of people have gotten those ugly hate mails. It’s the same thing. We’re not all Jordan Belfort, who’s making 100 phone calls in a day. Before you dive into it though, you’ve got an idea behind what an investor is truly worth of to you.

This is a major revelation when I dial this in. Chances are if you’ve got entrepreneurial people in this or they’d been in business for themselves, they probably heard the lifetime worth of a customer or a client, which is figuring out how much a customer is worth to you over the lifetime of your working relationship with that person. I’d heard of that many years ago. I applied that to my business in Costa Rica. I was thrilled at that time when I realized the lifetime worth of a client for me then was $12,000. That’s fantastic. When I applied that same concept to what the lifetime worth of an investor partner was for me doing the rent-to-own deals, it was $120,000 over the law. That’s the profit in my pocket. That’s not gross. That’s not before doing splits. That is my share of the profits working with an investor partner over the lifetime of our working relationship.

What we want to start out with is what is your average net profit on a deal. Everybody is doing different things. You’re focusing on notes. It’s a little bit different there. If you’re doing single-family homes or if you’re doing multifamily or you’re doing a lease option, you’d go on flips, you’re doing whatever. Everybody is a little bit different. Every market is different. Every asset class is different. This is going to take a little bit of thinking. Let’s use the rent-to-own thing as an example because that’s where I figured it out. With my rental deals, I figured out over a two or three-year period, by the time I took all of the profit centers into account, I have paid out my investor partners. I would end up with about $40,000 in profit at the end of the day. The next thing we want to figure out is how many investors do we need to do a typical deal? In my case, my minimum investment was between $75,000 and $100,000. I only wanted to have one investor per deal, which is the ideal number for me, the smaller deals.

It’s also the legal side of things. If you’re starting to pull money, you can get in trouble if you don’t have a fund or are not securities licensed. One investor per deal is a smart ask. It may be different north of the border there, but here in the United States and a lot of places, it makes it easier because you could have too many cooks in the kitchen.

It definitely makes it easier. If you’re getting into multifamily properties, you might need to have more deals. You might need to syndicate things. Make sure you stay legal, that’s for sure. For that case, I needed one investor per deal. The next thing we want to figure out, so one investor per deal, $40,000 total profit to me. How many deals can we reasonably expect to do with an investor partner over the lifetime of our working relationship? I decided I want to be conservative. Even though it’s probably a little too conservative, I’m going to say realistically, let’s say an investor will do two deals with me over our working relationship. When I cash them out one deal, chances are we did a good job.

They’ll reinvest that money in the next deal or if they’re happy with how things are going along, maybe they miraculously come up with another $75,000 or $100,000 to do another deal at the same time. When I first started this, I thought, “One investor is doing two deals. If each deal is worth $40,000 to me that would mean that an investor is worth $80,000. I forgot to take into account, if the investors are a happy camper and we encourage it, chances are we can get some referrals out of that. Being conservative, I thought, “Let’s be not too pie in the sky with this.” Let’s say for every two investors I get on board, I get one referral. Is that pretty conservative?

It’s conservative. You should be able to at least half a referral per person or at least one.

NCS 494 | Attracting Investors

Attracting Investors: The lifetime worth of a customer or a client is figuring out how much they are worth to you over the lifetime of your working relationship with them.

 

It became the equivalent of one and a half investors. I’ve got my average profit per deal, $40,000 multiplied by one investor per deal. It stays at $40,000 multiplied by two deals that investor will do with me over the lifetime. That brings it up to $80,000 and then we’ve got the referral factor. We got to add on another 50% multiplied by 1.5%. That’s what brought it up to $120,000 for me. What I’d encourage people to do is the exact same thing, figure out what the average net profit is to you on a deal and take it. If you’re doing long-term buy and hold, I’d say look at a ten-year timeframe. If you’re doing a deal where you’re holding onto it for long-term, let’s look at a ten-year timeframe and make sure you remember all the different profit centers if your particular with strategy. Depending on how you count on there, it can be seven or eight so you’ve got instant equity.

If you’re getting a deal on the property right, you go and make a good deal. You’re getting forced appreciation. If you’re fixing it up and making it prettier and more valuable, you’re getting cashflow. Cashflow is king. You’re getting mortgage pay down if you’re doing it that way. Over time, you’re getting natural market appreciation. You’re also getting the benefits of leverage using the bank’s money if you’re doing that way and you’re getting depreciation if you’re using that with long-term strategy as well. Those are the ones that come to me off the top of my head. I might be missing one or two, but that should cover most of it. It’s hard to explain verbally.

If you’re doing two deals, you’re going to have one investor that’s going to at least do two deals with you. You’re making $40,000 per deal as your net profit and then you expect to at least get one referral from every at least two investors. The numbers make sense. It’s simple math. We see how you can with a $120,000 value to you per investors. With notes, it might be a little bit less because we’re talking 12 to 24-month timeframes to keep it as performing and sell-off or vice versa. It’s still very feasible to make things happen. The more often you do it, maybe your referrals might be a little lower but that’s okay because some people have to hoard or they’re getting good returns versus sharing it with everybody.

Here’s the other thing though. What I found is typically for deals that are a much shorter timeframe, like notes, you’re getting higher turnover investors. They’re doing a lot more deals with you. What I usually say is for long-term type deals, use two deals per investor. If you’re doing flips or perhaps even with notes, you can be looking at four to six deals per investor partner, which I’m sure you’ve seen that many times.

You’ve got to calculate what’s going on, your velocity of capital, average timeframe. That’s good stuff there. Hopefully, that was another nugget for you. I love that. It’s a great thing. Everybody can take that into account. It’s about doing the deals though when it comes down to you. We can be worth that. If you never are getting, making any offers or making any deals happen or getting deals funded or having investors show up at your door, spend my money for me. What’s your formula for that or what’s your philosophy on giving the investors to chase you versus you chasing the money?

Have you ever heard the term a smart person learns from their own mistakes and a wise person learns from the mistakes of others? I was smart. I learned from my own mistake. I still vividly remember that experience. It sucked. You’ve been through something similar, maybe not the same situation. Losing a deal like that and getting mud on your face, that’s a good slap to wake you up and shake things up. I said, “That didn’t work. That sucked. Let’s do something different.” Through trial and error and applying twenty-some years of marketing background and lots of experience in different fields, I said, “How do we apply this to finding investors to raise the capital?” That’s where I came up with this five-step process.

The first thing we want to do is focus on a group of people. We want to create a target group of prospective investors. The magic number I’ve found for my clients is shooting for about 200 of them. Where do we start? I know things are a little bit different south of the border but pretty similar. You have got the Securities and Trade Commission. We’ve got Provincial Securities Commissions here. Bottom line, they’re all nasty and they want to protect Joe public from getting ripped off by evil real estate investors. That’s what they’re out there for.

We’ve got to stay compliant with them. Up north here in Canada, we’ve got this exemption we can raise capital that we can bring on friends, family and close business associates as investor partners in our deals. I believe that’s something similar down in the state. That’s where we want to start. Bottom line, what I found is for anybody to invest, they need to know you, like you and trust you. It’s a shortcut when we start with this group because we got two out of three taken care of. Just like the Meatloaf song, Two Out of Three Ain’t Bad. We’ve got a group of people that already know us, theoretically already like us, now, what we need to really work on is the trust factor with these people.

We come up with that group of about 200 people and everybody says, “That sounds pretty tough to come up with a group of 200 people that you have a preexisting relationship with.” It does sound a little bit tough. What I suggest is that people start with a much bigger group and whittle it down quickly. When I was first doing this, I thought, “I’ll try this.” I pulled up the old cell phone and I exported all of my contacts from the cell phone. I found out that I had over 900 contacts on my cell phone. Dump in all the contacts from your email address, your email accounts, dump in your contacts from your Facebook, your LinkedIn, get this big group, quickly go through it and delete anybody that you see on that list that a face doesn’t pop into your mind. That’s the shortcut. Instead of coming out with 200 with 1,000 or 2,000 and whittle it down to 200. Does that make sense?

It totally makes sense because if you don’t know him, it’s not about who knows you. It’s not about who you know, but who knows you so you don’t know him, they sure don’t know you.

We want to stay compliant as well. That’s the first route. We come up with that list and we avoid doing what I did, which was spamming everybody. What I developed is what I call a warmup campaign or a reconnection campaign. It’s a simple little three-step campaign. The first step is you send out a little email, catching people up on what you’ve been up to for the last three, four, five years. I call this the Christmas letter from aunt Nadine. You’re a young guy so you probably don’t remember this stuff. This is way back in the day before the interweb existed and Bookface was around. Everybody was connected with all this stuff, people used to write letters. I know it sounds crazy. They put stamps on envelopes and they sent this stuff up.

My aunt Nadine was amazing in this. She had five kids and a gazillion relatives. She was very efficient. She would write one letter at Christmas time, four or five pages, catching everybody up on what she and the family have been doing. She would photocopy that letter and send it out to everybody in their Christmas cards. Long-distance was super expensive. You weren’t picking up the phone and talking to people. This was how people communicated. Every year, we’d get this Christmas letter from aunt Nadine. It was cool because we got caught up on her and all the family in one fell swoop. We want a modern-day version of that. Just a little bit, not too long.

A little bit about what you’re up to professionally, what you’re up to with the family. If you’ve got kids, how old they are, what grade they’re in, what they’re into, your spouse or significant other, talk about the good stuff, talk a little bit about the not so good stuff as well. We’ve all had stuff happen in our lives, deaths, divorces, moving, whatever. Talked a little bit about that. Don’t dwell on it. We want this to be a genuine communication or real communication. Not just one of these Facebook posts where everybody’s lives are amazing. It’s real. Catch them up on what you’ve been doing a little bit about work. Don’t get into real estate too much. If you’re a full-time real estate person, great. Talk a little bit about it, but we’re not trying to pitch anybody yet.

This is legitimate reconnection, trips you’ve taken, hobbies you’ve got, the sports you played or whatever. At the end of it, it’s important to say, “That’s what I’ve been up to. How about you? How are you doing? Please click reply to this email and let’s catch up.” You send that out to all 200 people on your list. You can do that through an email autoresponder. It’s something like GetResponse and Mailchimp or something like that. You do it once and it goes out to everybody. People are going to start replying and make sure you have a genuine reconnection with the people that reply. That’s step number one.

Step number two, three or four days after that you do the same thing, but instead of sending out a plain text email, you do a little video version of what you did. The video is awesome. It’s the next best thing to being there with somebody in person. Everybody has freaked out about the video. Imagine if you got a video from a long lost friend, somebody you haven’t seen for ten or fifteen years. All of a sudden, they popped up on your screen and they caught you up on what they’ve been up to for the last few years. How cool would that be? It’s awesome. That’s how your friends are going to feel. Your contacts are going to feel as well. Send that out again. That’s what I’ve been up to, “I’d love to hear how you’re doing. Please hit reply to this email. Let’s catch up.” That one gets a lot of response.

The last email is all about giving them the heads up for what I call the transition message. They’re a short video, probably about a minute long, saying, “It’s Dave. It’s been good reconnecting with you over the last week or so. I want to let you know that moving ahead, I plan on doing a better job of staying in touch and letting you know what I’m up to with real estate.” It will say something I’m excited about. I’m doing well with it. In fact, real estate investing done the right way is the best way for everyday people like us to get a good solid return on our money, backed by something solid, real property. Maybe sometime in the future, you might even want to partner up with me and share in the profits on a deal. If you’re not interested in real estate, that’s okay too. You can always click on the unsubscribe button at the bottom of any of my emails. You’ll be taken off my list immediately. No hard feelings. In the meantime, if you haven’t had a chance to get back to me and let me know how you’re doing, please hit reply. I’d love to catch up. Take care. God bless. Talk to you soon.” Send that one up. That one is magic because it gives people the heads up that you’re going to switch gears. You’re going to do a better job of staying in touch. You’re going to start talking real estate.

It totally makes sense. If you’re using Mailchimp or something like that, you’re able to see who’s clicking on your emails, who are opening the emails and seeing if they responded to you or they unsubscribed or they’re waiting for a response from you.

You’ve been doing marketing and email stuff forever so you know the answer to this, but most people would ask about a live event. They say, “How many people do you think are going to opt-out from your list after you send out that third message?” Quite often I had people say 80 or 90% are going to opt-out. What I found is if you’ve got to listen to about 200 people, between all three of those emails, you might have three, four, five, maybe six people opt out of that campaign. You’ve given the heads up. You’re giving them a fair warning that you’re going to start talking about real estate. Quite often my clients are starting to book meetings and consultations from this process. It happens way more often than I’ve had, about half of the time and they start raising capital right from this process. It’s not designed for that, but it happens more often than I would have thought.

NCS 494 | Attracting Investors

Attracting Investors: Investors need to know you, like you, and trust you.

 

I would think that would be something that you would see happen quite a bit, especially with Calendly and stuff like that. We’ve been using that with our bank asset managers as we’re reaching out and touching base, “Do you want to schedule fifteen minutes to catch up? Let’s pick a time that works for both you and my schedule and go from there. I want to focus on that fifteen or thirty minutes to catch up.” There’s a great tool to do that. Plus once they connect with you, it’s a personal relationship again. It doesn’t always say, “Fund my deal or buy my stuff. Two hundred people, that’s not a big list.” Most of us have more than that in our media aspect. You said you had about 900 contacts on your phone but you can only remember four or five phone numbers.

The next step is to make sure you’ve got something to show somebody if they show interest. That’s where we work with our clients. We put together what I call $1 million investor presentation. Especially the salesy guys say, “You should be able to explain your deal on the back of a napkin or on a legal pad or the Sharpie pen and all that stuff. I find few people can do that well consistently. What I found works best for most people is to create a short slide show presentation, a PowerPoint or a keynote, something like that. Something to take people through.

It’s a lot more visually interesting for the other person and for my benefit, especially the older I get, the grayer I get, the more it keeps me on track because I don’t want to forget any of the important points. I don’t forget any of the important questions I need to ask people. I don’t go too far off on tangents. It keeps me focused. I find that works well because when you started having people reach out to you, you can meet with them in Starbucks or you jump on Zoom, share your screen and show them your presentation. It doesn’t matter if you’re in Austin, Texas and I’m in Kamloops, British Columbia. We can still go through the presentation so it works well.

How long do you see the presentation need to be? We’re not talking like 50 slides.

I do have about 45 slides but here’s the important part. There’s some repetition in there and it’s fast. For example, some of these slides, literally you’re going through it in less than ten seconds. The whole presentation I’m shooting for with questions and back and forth, I’m shooting for 25 minutes-ish. That’s what I’m shooting for.

It leaves plenty of time there for Q&A. If somebody’s got a 30-minute time slot or they’ve got 45 minutes because they’ve got to go somewhere. It’s a smart thing. The last thing you want to do is be in a two-hour presentation for a Timeshare.

You make sure that you’ve got your presentation ready to go. You’ve practiced it a few times. One of the tricks that we’d like to do is set our clients up with several practices runs with actual people in the first place, which quite often lead to raising capital as well. You go in as if it’s a practice run and you kick in your marketing or what I call the three Cs: Constant Consistent Communication. A lot of say what’s the difference between constant and consistent? Constant is more a matter of timing. It’s coming out on a regular basis. Scott, you’re a marketer so you’re familiar with how often you can reach out to people. Most regular people are freaked out of the idea of bugging the people on their list. They’re absolutely panic-stricken about that. To get started with, I always recommend starting with one thing, get it going and get it going consistently. Shoot for a minimum of once a month to get started with. That’s rock bottom minimum. It can be whatever floats your boat the best.

I love video because like I said, it’s the next best thing to be in there. Plus I find it a lot easier than writing. If you’re into writing, I’ve got clients and students that are phenomenal at doing blog posts or doing electronic newsletters. That’s what juices them up. Whatever it is that you can do on a consistent basis, start with one thing, what Dean Jackson calls your flagship communication. That’s one thing that you can do consistently. Get that up and going there. If you to add more stuff, do that. I know you’re a big fan of this, but it’s all about education and entertainment. You want to be a little bit light on the education side quite frankly when it comes to raising capital because most of the people that are on your prospective investor list are not real estate weirdos like us.

We got podcasts. We’re doing this. We’re seeping in this. This is our thing. We made a mistake and think that the average human being is into real estate like this and they aren’t. What they want to know is that we know our stuff. What I found has worked the best is a combination of a little bit of education, Reader’s Digest level, high level and entertaining. You have something coming out on a regular basis. Start with once a month, work it up to twice a month and get it up to once a week is the ideal thing I’ve found works best for people.

I would agree 100% wholeheartedly with those numbers. Some people were like, “What am I going to talk about?” The thing you’ve got to keep in mind is you’ll think of things. The same questions you have are often the same questions people have or people ask you questions, make a note of those. I guarantee you if one person is thinking and others are thinking as well. The best success we see that our students are people that are sending an email out. Usually every Sunday night they’re falling up or they’re doing some bit of video, whether it’s a separate topic or they’re simply doing a recap of the video so somebody can watch the video in two minutes or three minutes versus reading it because everybody learns from it. Some people like to listen, some people like to watch and some people like to read.

Video logs are one of the most popular things or one of the things that tend to work the best for folks. Coming up with content isn’t as tough as it might seem at the beginning. For example, one thing we do is why real estate. We compare and contrast real estate investing to everything else out there, bashed out of stocks, bonds, mutual funds, GICs, all that crap and show why real estate is a thing to invest in. Another thing, you might take a look at our top ten, David Letterman style. The top ten reasons for investing in notes, I’m sure you could come up with ten, twenty reasons why notes rock and everything else sucks. That’s what you’re focused on. You could talk about profit centers of real estate investing. Depending on how you count them, there are seven or eight right there. We’ve got seven or eight pieces of information. It’s a matter of brainstorming.

I like to take a look at the calendar because the calendar will provide you so much stuff. If you’re going to get to like the once a week thing, the mistake that our aunts made early on, it was only something that one five-page letter around Christmas time. If you look at the calendar, every month has a major holiday, which is simple, “I want to take the time to wish you and your family a happy 4th of July or Happy Labor Day.” Also people have different things like the best stuff, the top ten list or top three reasons or stuff like that. I’m a big proponent of a case study or networking event. Here’s the event I’m going to this month. Whether it’s the local meetup group that you’re going to or real estate club or going to a conference or expo or attending something is always great stuff because people are attracted to people doing something.

Also, deal walkthroughs are awesome. That’s the best because there’s the proof in the pudding. Here I am at the property cleaning up cat crap or whatever I’m doing. It doesn’t matter. You’re doing your thing. You’ve proven that you’re an active real estate entrepreneur.

As Ron LeGrand used to say, the smell of crap and piss turns him on. It is the smell of money to him.

Ron is a different kind of guy.

I had the good fortune to travel as a vendor at a lot of Ron’s events from 2004 to 2008. I spent a little bit of time with him. He’s a cranky older guy, the old auto mechanic in him. If you had Snickers, you were his friend. If you didn’t have Snickers, he didn’t like you that much.

I met Ron through Dan Kennedy. I was part of the whole Kennedy gang for many years. He’s a good guy.

Talking about case studies, whether it’s before, maybe after photos or previous case studies and this is the thing, people come in, “I haven’t proven the concept that the people are going to ask me. Tell me about the deals that you’ve done.” I’m like, “I haven’t started with any deals.” What would be your suggestion for somebody who’s brand new, who hasn’t done a deal or two?

NCS 494 | Attracting Investors

Attracting Investors: Start with one thing, get it going, and get it going consistently.

 

You borrow a deal.

I’ve had many people call me and asked me about this and I’m like, “Use somebody else’s deal.”

Don’t BS people and tell them that it’s your deal. You don’t want to do that. You want to say this is the deal that we’re looking at. “These are the deals that we’re going to be doing,” and explain it. That works well. That doesn’t need to stop you from going hook up with somebody who’s doing the deals you want to be doing, work for free for a little while and film yourself as you’re working for free. Maybe for people that are starting right from scratch, do that work for free. Maybe work for a tiny little piece of equity in the deal. You can show that as if it is your deal. “This is a deal I’m involved in legitimately.” That’s one way that you can have some legitimate deals to show for yourself as well.

Some people are like, “How do I find those?” Go to your local real estate investment club. Go talk to people. Who needs an extra back or hands to do demo day or to clean up the hoarder’s house? You find a hoarder’s house. I was reading USA Today. Hoarders found a dead body rolled up in a rug. We found a grandmother underneath the bed that had been there for three years. Even some guy that’s misplaced for ten years fell behind the cooler and died.

People always need help cleaning up. You deserve a piece of that deal.

There are things like mowing lawns or taking out the trash.

Whatever your strength is. If you’re good with numbers, you’re going to help the guy or either gal with their bookkeeping or whatever it is that you can contribute to the best. Don’t go try to pick people’s brains and try to get all this information and stuff for free, legitimately offer to help out whatever it is that they need help with. Do it with a good attitude and be Johnny on the spot.

That’s the thing sharing that stuff is taking action. 90% of people don’t do anything. You have a lot of people that go to investment clubs to scratch their itch and are scared to take that step and the things you’re talking about, especially if nobody is sending the email out or done a video, there are a lot of BS excuses that we tell ourselves not to do that. If you do that little extra 5%, you’re going to stand out from the crowd and people are going to either surround you and want to work with you or invest with you.

The bottom line is you’ve lived this and you know so many successful people. If you want to get extraordinary results, you have to do extraordinary things. You have to do things out of the ordinary. If you’re worried about what people are going to say about you, what people are, how they’re going to respond, what they’re going to do, then you’re going to stay stuck because you’re going to do nothing. If you’re wanting to use other people’s money to grow your portfolio, to create whatever that real estate dream lifestyle is, you have to do something that you’re not used to doing. You have to do something different. Doing what you’ve been doing has got you where you are. You want to get somewhere else, so you’ve got to do different things.

Is there the risk that somebody might reply and have a snarky remark once in a while? It happens rarely. I’ve done this with hundreds and hundreds of people. Rarely do they get a snarky remark. They do have a few people opt-out. Those people wouldn’t have invested with you anyhow. They’re doing both of you a favor. Don’t worry about it. Thicken up the skin a little bit and realize that quite frankly, most people are not thinking about you that much. They’ve got their own lives. They’re doing their own thing. If they get an email from you once a week, first of all, most of them aren’t going to open it. That’s the reality. If you’re sending out 200, at the beginning you’ll be doing well. You’ll probably be getting 50%, 60%, 70% of them opening it up. Over time, it will shrink. People can always self-select, opt themselves out if they don’t want to hear from you. Don’t get your knickers in a knot about that stuff.

Is there a point or a transition in your presentation? The video that you would recommend to people about the hook or the ask? It’s great to give a presentation, but you’ve got to get to that point where you’ve got an ask or hooked a request if they want, get more information to invest with. Any expertise that you’d like to talk to our audience about that.

The video logs, every single one of them has an “ask.” Every piece of marketing you set out there has an ask. People say, “Dave, how do you get people to call you a bunch of deals?” I tell them too, they hand in the videos. That’s one of the profit centers. There are six others. If you’d like to find out how you can benefit, there are these profit centers as well without having to swing a hammer or deal with tenants and toilets. Give me a call, (250) 374-2897. Let’s have a chat and see if it makes sense for you. It’s pretty much the same call to action at the end of every single message. Hit the contact us tab on the website, book an appointment on my Calendly, whatever it is, whatever you want them to do, tell them to do it and they’ll start doing it.

I’m tired of asking for money. I’m like, “You don’t ask for money. You’ve got to have to ask for it.” It’s like give me the best presentation. If you never give them or ask for them to sign up or to contact you, you wasted your time. There’s nothing wrong with giving content every once in a while, but your time is valuable. That 30 seconds or that one minute where you’ve got the slide or the spot in your video is the most important aspect of it. You’ve got permission if they’re hanging around until the end. You’ve gotten from permission to ask them something if they’ve gone through an afternoon or they’re watching that video or that webinar that you’re doing or whatever it might be. A few people opt-out. Some snarky people, you don’t want to invest with them. You’re glad that they’re snarky so you can unsubscribe from them and go from there.

It’s this constant, consistent communication. That’s the thing. What took me a long time to figure out is that because I’m keen on somebody to invest with me. It doesn’t mean that they’re ready to invest with me. Out of that group of 200 people, first of all, we don’t know who’s got the money and who doesn’t have the money ahead of time. What I found is quite often the people that I assume have the money are all flash and no cash. The people that have the money, you would never suspect it. They’d got it stocked away. They’ve lived frugally or whatever and then poof out of the woodwork here comes Aunt Myrtle with $250,000. You go, “How did that happen?” but it happens.

You have to have that. That’s the importance of that constant, consistent communication because there will be some people in your group that are ready to rock and roll sooner rather than later. There are going to be other people that it’s going to take some time for them to warm up to the idea, for them to start believing that you know what you’re doing and for you to create that trust factor with them about your deal. This is the biggest mistake I see people making all the time when it comes to raising capital, is they’ve got a deal on the go. They hit it hard. It’s all about this deal. They splash it all over the place and then it’s crickets after that. You don’t hear anything until the next deal comes around.

They wrapped it all up again and dunked it into, that’s the wrong thing to do. What you want to do is the chicken in the egg scenario. What do you want to have, the deal or the money first? In my opinion, you want to have the money lined up first and then you can go find the deals with complete confidence because if you know you’ve got the cash taking care of, then you can go negotiate heart. You can go in and make offers with fewer subjects in them. You can take much bigger, more massive action faster than if you’re worried about if you’re tentative about it because you’re not sure if the money’s going to come through.

We’re going to splash it everywhere and we don’t share anything until the next month or two months goes by. You can’t do that because people will see straight through that. You’ve got to become a niche expert and share that stuff with the good, the bad, the ugly. What’s going on? Those kinds of things.

That takes us to the next point, which is all about demonstrating your expertise and your authority. That’s exactly what we’re talking about. Showing them that you’re actively doing what you say you’re doing, sharing your deals, maybe even sharing some of the not so great sides of things. Don’t talk about the problem, talk about how you’re overcoming the problem. In the back of somebody’s head, “Why would I want to invest with Scott? Why would I want to invest with Dave?” They’re coming up with a problem and they’ve got a solution because most people understand that crap is going to happen. Stuff’s going to happen. Not everything’s rosy 24/7. How you overcome these challenges goes a long way.

NCS 494 | Attracting Investors

Attracting Investors: Time and circumstances change people’s minds. Just because somebody is not ready to invest with you right now, it doesn’t mean they won’t be down the road.

 

The other thing is, it might have been our mutual buddy Ron that said this first, but time and circumstances change people’s minds. Just because somebody is not ready to invest with you right now, it doesn’t mean they won’t be six months or twelve months down the road. If you keep in front of them, maybe keep up that constant, consistent communication, the next time they get that mutual fund statement and see how much money they’re not making, “I’m not doing this anymore. What else can I do with my money? Who’s going to pop into the mind?” That guy or gal that’s been constantly and consistently communicating with them about how great real estate is and how they should get involved. Here’s a way to do it. Hands-free, no sweat, because Scott does all the work.

Whether it’s their statement or they’ve been laid off and they got a roller 401(k) and something and they want to put it into something that’s going to help them out, there are a whole variety of reasons. That’s what we see a lot of times is when people opt into our website, it’s a three to six-month timeframe before they even make a buying or funding decision. It’s almost like the old days of you’ve got to court somebody, it might be three months before you get a kiss.

Courting is a perfect analogy there. It’s taking your time. It’s not rushing it. It’s not trying to get in the sack right away. It’s that gradual progression especially for people with their money. Some of them are going to be ready to go. Others are going to want to see that you’re not a flash in the pan. Some people are concerned about this. “I tried my hand at another business opportunity in the past of the network variety. I got all excited about it. I told everybody I knew and home parties. I didn’t quite make my millions. I’ve got a few people signed up and none of them quite made their millions either. I might’ve shot myself in the foot.” No, you haven’t. First of all, you’re not alone. I can’t remember the stats, but it’s like 95% plus of everybody who’s been in one of those opportunities., yours truly included bombed at it.

Don’t worry about it if that’s the case and if you take it a run of people, be upfront about it. That might be something I would cover in that whole warm up thing as well as it’s going to be front about it. Don’t try and hide it. Don’t try and pretend it never happened and say, “That didn’t work out and I found something so much better and here’s why.” That could be a whole thing, “Why real estate is so much better than multilevel marketing.” You can come up with a gazillion reasons why. Don’t let anything like that stop you.

Many people are getting thumbs up and people like it on our Facebook Live. I’ve drawn a few circles as well. People are saying, “You’ve got an amazing podcast. It’s doing great. I was honored to be a guest on it.” That’s your way of being consistent and adding credibility to your stuff on a regular basis.

There are lots of things. That’s one of the things, demonstrating expertise and authority. A great way to do that is to have your podcast. Scott, you’re seen as the note guy. You’ve got podcasts, you do Facebook lives, you do all this great stuff. You don’t have to get that carried away. You don’t have to even start your own podcast. Being interviewed on podcasts is a fantastic way to boost up your credibility and make sure that you let everybody you know, know about your interview. You push that out as well. Speaking at your local real estate investment club meeting and volunteering. You don’t even have to speak necessarily, although that’s ideal, being part of the team that’s putting it on, that’s huge because you get up, even if you’re introducing speakers, even if you’re helping people get registered, get it.

People see that you’re active in this. Probably one of the best ways to be seen as an authority is to be an author. That’s why I’ve got seven or eight books behind me. Not because I am particularly gifted as an author, not because I particularly like writing. It’s a fantastic way to be seen as a credible authority and there are all sorts of ways of things. You need to get out on the news. If you’ve got something timely, you can do press releases and you name it. There are all sorts of ways to create that credibility.

Dave, what’s the best way for people to reach to you to find more about your five-step formula, your books? To find out more about what you’re doing and how you’re helping people about raising the capital, avoiding the horse hooey and going and finding out the profits?

Probably the best thing would be to get an eBook copy of my book the Money Partner Formula, which you can get at InvestorAttractionBook.com. That’s my whole goal. My goal for you is instead of you chasing after investors, instead of you desperately chasing after the capital, let’s turn that around. Let’s get you attracting investors and their money to you so that you can do as many deals as you want, create your ideal real estate portfolio, your ideal net worth and your ideal income through real estate investing. That’s what it’s all about.

Dave, thanks for taking so much out of your busy schedule to join us here on the show. Thanks for delivering great content and some great nuggets on this show as well.

Scott, thank you very much for everything that you do. You’re a rock star. It’s a pleasure to get to know you. I look forward to meeting the next time when I’m in beautiful Austin, Texas.

Thanks, Dave. We’ll definitely see you there. Go take action. Check out the eBook, take some of Dave’s counsel because he’s helped hundreds and hundreds if not thousands of investors get over the hump to help them get investors chasing you versus you chasing them. Go out and make something happen. We’ll see you all at the top.

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About Dave Dubeau

NCS 494 | Attracting InvestorsDave Dubeau is a Real Estate Entrepreneur, Best-Selling Author, Speaker and Investor Attraction Expert based in Kamloops, B.C. Canada. He began his real estate investing career in 2003 doing 18 deals in 18 months. He later switched his focus to client-first rent to own deals, and nowadays he invests in multi-family (apartment building) properties.

For the last several years Dave has been the World’s #1 Investor Attraction “Imple-Mentor”. Using his proprietary 5 Step Money Partner Formula™, Dave helps his real estate entrepreneur clients to grow their portfolios significantly and in record time by attracting investors (instead of chasing after them).


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