I’m just a rookie. This is my first time. Why would someone give me money?
The first time is always the most difficult, right? It doesn’t have to be.
At the REIBrain, we get a lot by nervous first-timers with this question.
So here’s 9 key steps to developing relationships with investors when you’re new to the game:
1. Have a good plan. Too many rookies don’t do their homework – they want to meet an investor first, then figure out the plan. That’s backwards thinking. Don’t create a new business plan for each property – treat yourself as a business, and invest the time in making a great plan.
2. Know your market. Gain the knowledge, get the investor. Most investors are really busy people. They rely upon smart people to help them make money. If you know your local market better than anyone else, you’ll be ready to grab the best deals.
3. Be patient, and play your cards slow. Most rookies act like the world will end if they don’t buy the first good deal that comes along. Investors know that timing is everything. Don’t act like a punk kid who can’t wait.
4. Relationships always come before transactions. If you focus on forming solid relationships, you’ll find plenty of people who will trust you. So be trustworthy. Never compromise your integrity for the sake of a deal.
5. Gain confidence in yourself. Nothing gives away a rookie in the game faster than a lack of confidence. Study professional poker players and their tricks. Learn the arts of seduction, sales and negotiation. Demonstrate your confidence in yourself if you want others to invest in you.
6. Remember everyone started with the first one. We’ve all been there. Turn your weaknesses into strengths – turn your pitch into a long-term approach with a solid business plan. Your first transaction should be only the first of many, not the making or breaking of your career as an investor.
7. Ask for mentorship and help from others. There’s nothing more disarming than genuine vulnerability – that’s how real trust grows. Give people the chance to show their true colors by exposing some weak spots before you give them your total trust.
8. Build a solid team to boost your credibility. Find and align yourself with local seasoned veterans in real estate, mortgage, insurance, law, title and finance. Develop their trust and get their endorsements. They’ll introduce you to investors and show you the best deals.
9. Interview your investors – not the other way around. Rookies make a huge mistake when they act like kids at a first job interview. You had better do a great job of screening your investors and making sure that they’ve got the credibility to back up their claims. Finding the right balance of trust and skepticism is hard, but it’s one of the most important and misunderstood skills in real estate.
