A number of real estate investors usually make the mistake of not having a pool of investors before closing a deal.
Instead, the right approach is to start building your pool of investors before you go out and waste your time on a deal that might not be all that exciting in the first place.
The simple reason for this is once you close a deal, you’ll be under a lot of pressure to find investors which will not fall through anyways.
That said, here’s a 4-step process to build your pool of investors:
#1: Create a pitch book
Prepare a unique investment strategy so as to make good on the great buying opportunity that is available. In short, what is your strategy to make money investing in real estate? Put it together in a short 8-12 page pitch book.
#2: Build an investor list
It’s important to build a list of investors that will have an interest in real estate. As a start, look for friends and family who might be willing to invest money apart from business associates, attorneys, doctors, accountants, financial planners, property owners and so on and so forth.
#3: Conduct meetings with potential investors
Have breakfast or lunch meetings with as many investors on your list. It’s a good idea to review your pitch book during every meeting to see if there’s any interest. Just remember to not sell anything but focus on building relationships.
#4: Maintain a Database of Investors
Maintain a database of investors who might be interested in future deals. Ensure that you add as many investors to your database and keep it as a goal. Remember to remain in contact with your potential investors by communicating with them regularly in the form of articles, stats, stories etc.