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Syndication Part 4: How to Market Your Note Buying Fund

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signsOur previous three lessons about syndication have covered a lot of hard-hitting material.

First, Susan Lassister-Lyons – aka. “The Madam of Money” – introduced the concept of syndication in a thorough exploration of Raising "Pooled" Capital for Real Estate. Susan has been a real estate investor since 1994, has raised $26.2 million in private money since 2004, and has participated in 600 real estate transactions – and in this seminal lesson she explained why she loves the private money “pool” so much.  (Short Answer: It’s one heckuva cash cow!)

Then, in our follow-up to Susan’s introduction, we dug deeper into her business of choice by briefly examining The 11 Ways to Profit from "Pooling" Capital in your own syndicated note-buying fund.  (See what I mean? Eleven ways!  Even without using your own cash.)

And most recently, Susan walked you through her helpful step-by-step guide about How to Create and Manage a Note-Buying Fund.  (It’s like Fund Creation for Dummies, but more concise – and entirely online.)

Today, building upon the foundation laid in these previous lessons, it’s time to dust off your notes as Susan explains EXACTLY how to market your own note-buying fund …


Stop reading here if you have not been through these three previous lessons on creating your own note-buying fund!

(It will only take an hour.)

You must understand “the basics” of syndication before Susan can tell you how to market your own note-buying fund.

Of course, it’s a bit of the “chicken and the egg” here.  You can’t market your note-buying fund if you haven’t set it up correctly - but you can’t really have a note-buying fund if you don’t know how to recruit investors through strategic marketing.

So if you haven’t gone through the previous note-buying lessons, please stop right now (last chance) and review those lessons.  Then you can come right back here, to this lesson.  We’ll still be here when you get back – we promise!

-waiting patiently-

Ah!  Welcome back!

Now that you are familiar with Susan’s previous lessons about syndication and note-buying funds, let’s move full steam ahead and allow Susan to explain her simple-to-follow 2-step process for marketing your syndicate.

salesmanMarket the Opportunity – Don’t Chicken Out!

Marketing.  This is typically where almost every single would-be investor checks-out and says, "You mean I've got to talk to somebody? Not for me!"

You see, all the stuff we’ve talked about thus far is quite simple and straightforward, but now it’s time to market your syndicate.  And you really do have to sell the investment opportunity…

…because it doesn't sell itself.

Everybody seems to think, “I'm going to spend a lot of money to get this pile of papers and somehow (magically?) investors will come to you. But they don't.  They just don’t. You must actively market your investment opportunity.

Think about this for a minute: "Every business needs two things to succeed – (i) access to capital and (ii) great marketing."

If you do not market your syndicate well, then you’ll never be able to access the capital needed for operating your note-buying fund.

When you begin to market your syndicate, you must identify those who are going to be “most likely” to invest with you. Then, you must introduce your opportunity to those individuals on your list.

In this lesson I'm going to share with you my simple 2-step process for marketing your opportunity to investors:

  • Step 1 – Identify potential investors.
  • Step 2 – Introduce your offer.

But first, a note about the way your brain should be working…

headMind Shift to Millions

Before we dive into the first step I want to take a moment here to talk about your mindset.  What are you thinking about when you are preparing to introduce your opportunity to the people on your list of possible investors?

You need to shift your mindset to millions, if you have not done this already.  What I mean is this:  Remember that you are not borrowing money; instead, you are providing a money-making opportunity for your investors.

In the same way that your investors are closely evaluating your investment (in order to determine whether they want to partner with you), you are also looking back at them just as closely (in order to determine if you want them in your deal or not).  This process is called “identifying” your best investors.

Your New Identity: You Are A Fund Manager

When you create this fund, your identity becomes that of “the fund manager”. You're not “just a real estate investor” any more. You're not “just some guy schlepping for private money”.  You are a fund manager.

This is what people do on Wall Street. You need to adopt that as your identity, and you need to act like it.  You have the power. If you haven't read the book Pitch Anything by Oren Klaff, then I definitely recommend that book before you begin “pitching” your note-buying fund.  In his book, Klaff talks about being “in your power” and pitching these opportunities “from a position of power”.

When you pitch from a position of desperation or weakness, that's not the place you want to be – and people don't respond to that.

So, now that you have your new identity and millionaire mindset, it’s time to dive into actually finding potential investors.

peopleStep #1:  Identify Potential Investors

The three types of people who are most likely to invest in your opportunity are:

  • People who know you
  • People who already invest in real 
  • People who already loan private money

If you choose to be a syndicator, then you're going to reach a point in your real estate investing career – and in your fund career – where you’ll never need to beg for investment partners.  In fact, there will come a time when you're going to turn away investment partners.  You're going to tell people, “I'm sorry, but we're already full.”

And here's something you should be aware of: As I have created multiple syndicates, I have discovered that the person who contributes the least to your opportunity (or to your investment fund) is usually the person who is the biggest pain.

Go After the “Whales”

Accordingly, you want to attract and identify investors who will really invest with your fund.

For example, when you're pricing your units, don't price them low at $5,000 or $10,000 per unit, with a minimum investment of one or two units for your investors.   Instead, be sure to price your investment requirements high enough, say at a $50,000 minimum investment, so that you can weed out those “squeaky wheels.”

And always (always) remember you are not borrowing money. You're providing an opportunity for your investors to make money.

All righty then – on to Step #2!  This is where you are going to learn how to actually present your offer to your potential investor…

pitchStep #2:  Introduce Your Opportunity to Your Potential Investor

This is when you actually introduce your opportunity to potential investors.  I like to create something called a “Value Statement” in order to answer some of the questions that all serious investors will inevitably share – such as “What’s in it for me?” and “What do you do?”

When somebody says, "Hey, what do you do?", here’s what you should say. 

This formula that I use is, “I _______ so that _______.” 

For example, you could say: "I assemble lucrative real estate deals so that my partners make safe, consistent profits."

(Some people call this an “elevator pitch”, because it is well-suited for brief banter in an elevator…)

Guess what happens almost every single time? Almost every single time, the person responds by saying, "Oh really? How do you do that?"  And that's exactly how you want people to respond!

Now it’s time to create your official presentation, in order to follow-up with any potential investors.

Your Million-Dollar Presentation

You should customize your official presentation for every single prospective with whom you follow-up.  This customization will set you apart from most of his/her other potential investing partners, while also (i) creating an alignment with your potential investor and (ii) adding a layer of confident “coolness” to your approach.

If you're out there using the exact same presentation with every single private money partner, you simply won’t be successful. Mark my words… You need to customize your official presentation. 

synergyAlignment with Your Potential Investor

You want to demonstrate good “alignment” with your prospective investor. Good alignment occurs when you demonstrate personal and professional synergy with your potential investor.

Let me give you and example of how you can do this… 

Let's say that you spy a bit on your prospect.  (It's so easy to do this these days!)  All you must do is go to Facebook, and you can learn almost anything you want to know about a person.

If you were to visit my own Facebook profile, you would see that I’m a dog lover. And if you look at the pictures on my Facebook profile, you'll see an entire album filled with my dogs.

Now, if you went to my Facebook page and decided to establish rapport with me, you could really demonstrate alignment with me by saying something like, "Hey, I know you're a dog lover…"

Then, if applicable, you could say, "I'm a dog lover, too! Here are some pictures of my dogs! Tell me more about yours…"

And that’s where the confident “coolness” factor starts to kick-in.

Then, if applicable, you could tell me that you’re in the business of funding a multifamily apartment building that will be intentionally “dog friendly”, including an onsite dog park with dog socials every Friday night.  (If it involves dog lovers and free food, then I’ll definitely be interested!)

dogYou simply need to figure-out what your prospective investor is into, then tailor your presentation to each individual.  You may find someone who is concerned with the revitalization of certain communities and neighborhoods, so you would approach them with a proposal for (i) investing in single family homes and (ii) helping to stabilize communities hard-hit by the economy. 

Or if someone is really into the environment (ie. a “greenie”), like my assistant Laura (who hates it whenever I use anything plastic), you could say: "Look, Laura, we're using 100% sustainable building materials…"

All of these examples illustrate (i) alignment and (ii) the coolness factor typically required to get your prospect to invest with you.  You need to be customizing your presentations in order to get people to like you, trust you and ultimately invest with you.

Lastly, here is my quick outline that you can easily swipe and tweak for assembling your own Million-Dollar Presentation: 

  • Title

  • Alignment *** SECRET SAUCE
  • Problem
  • Solution
  • Coolness Factor ***SECRET SAUCE
  • Executive Summary
  • Project Overview

  • Company Profile
  • Testimonials
  • Partner Benefits
  • Call to Action

Remember: The key to marketing your note-buying fund effectively is to identify your potential customer, show them “what’s in it for them” and then customize a pitch-driven presentation that shows alignment and has a coolness factor. 


Do It To It! Immediate Action Steps

Here are the two simple steps for marketing your note-buying fund to investors…

Step 1:  Indentify the three groups of potential investors in your life.

  • People who know you.
  • People who already invest in real 
  • People whom already loan private money.

Step 2:  Introduce your opportunity to your potential investor.

  • Provide your potential investor with your Value Statement (What’s in it for them?)
  • Create your Million-Dollar presentation (customized for every prospect)
**You've Been Warned: We are not attorneys. We are not giving legal advice. We are doing our darnedest to inform you with the most up to date, relevant information but please consult with your attorney before implementing the strategies you've learned.

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