One of the biggest mistakes that real estate investors make is not having a pool of investors to fall back on as they look for a deal to buy.
Instead, they run around after finding a deal to look for investors and end up overpaying just to get a deal on contract – a deal that is not necessarily all that exciting.
So, given the importance, here is a 4-step process to building your pool of investors:
#1: Create a Pitch Book
First, it’s important to create a plan to make gains on a great buying opportunity. This involves your overall strategy to making profits in real estate investing. Put down your thoughts in a 8-12 page pitchbook.
#2: Build Your Investor List
The next thing to do is to make a list of people who are interested in investing in real estate and where you can begin with friends and family. Apart from this, look for business associates, accountants, financial planners, doctors, attorneys, doctors, property owners and REIA club members.
Of course, it’s a good thing to ask the people on the list if there are any other people who might be interested in investing in real estate.
#3: Conduct Investor Meetings
Now, it’s time to have breakfast or lunch meetings with potential investors. Remember: you’re not selling anything. Look at your pitch book and check for any interest. Make sure you use these meetings to build relationships.
#4: Build a Database of Investors
Once you know who has interest in your plans after meeting them, then it’s time add their profile to your database. Make sure you add as many potential investors as possible to your database. Keep in touch with them by sending them stories and articles and so on and so forth related to real estate investing and investment strategy.