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Investing Strategies

The Right Way to Market Properties to Investors

MarketingHi Moguls! New faculty advisor, Matt Andrews, here: wholesaler, growth hacker and serial entrepreneur. I’m also so bald that my head may blind you in direct sunlight. Consider yourself warned.

You might know me from my Real Estate Investors Guide book series or as founder of the Real Estate Freedom blog and podcast. I’ve also been trying my hand as a film producer. (If you haven’t caught Legends of the Knight on Netflix yet, you should.) My wife Lindsay and I love to travel, and we also work as founding board members of 3 charities: Khusi Hona: The Indian Orphan Project, The Rising Heroes Project, and Jamobility: The Jamaican Wheelchair Project.

But enough about my background…

I’m here today to give you some valuable REI info for my inaugural lesson. We’re gonna talk about one of the most essential skills you can ever learn in real estate: how to market your properties to other investors — the right way.

Whether you’re just starting out in REI, or (like me) you’ve been around for a while, odds are you’ve seen this happen...

Investor Andy finds a property he’s super excited about, but when he goes to pitch it to Investor Betty, all he can tell her is:

“This is a really great deal! The property’s solid, it’ll flip easily, and you’ll get your money back in no time.”

More likely than not, Betty won’t be willing to show Andy the money, no matter how awesome his property is. And why not? Because he didn’t come with all the info. His description basically told her nothing.

Think about it... Would you want to invest your hard-earned cash into something without knowing all the details? Probably not.

Instead, try to approach potential partners with the full investor package. Let me show you what I mean...

packageDucks in a Row: Pitching the Full Investor Package

Say you’ve got a new deal on the horizon – when you sit down with your investor, you should be able to discuss the following in detail:

  • Purchase Price - What’s the total up-front cost of purchasing this property?
  • Renovation Expenses - How much will it cost (realistically) to make all the improvements you want? Do your research on this. A savvy investor will know if you’re just pulling numbers out of your hat.
  • Carrying Costs - How much will it cost to hold the property for the duration of the deal? For longer projects, these costs will go up, so make sure you figure that in.
  • Projected Sales Price (ARV) - Do your homework on comps in the area and decide on a reasonable after repair value for your property. Based on this, you can determine the projected profit.
  • Timeline - How long will it take to complete the project, start to finish?
  • Construction Schedule - This isn’t just what will be done to the property, but when. Again, be realistic. If you tell an investor they’ll get their money back in three weeks and the project stretches on for six months, they won’t want to do business with you again and your reputation will suffer.
  • Photos - Your investor will want to see for themselves what the property looks like.
  • Comps - Make sure you’re comparing apples to apples, finding other properties as similar to yours as possible, and make sure they’ve sold within the past 90 to 120 days.
  • Rental Stats - It bears repeating: check out your comps. If you say your property will rent for $1,500 a month, make sure you can prove that similar properties in the area are renting for $1,500 a month.
  • Your Track Record - Last but not least, let the investor know about any similar deals you’ve done in the past. Even if it’s just one, that experience will set them more at ease about working with you now and in the future.

This may seem like a long checklist, but believe me, doing a little extra homework pays off. As an experienced investor, I can tell you that if you have all these facts ready when you approach someone, and you have a solid property, you’re probably going to walk away with a “Yes.”

And in that moment, all the research and number-crunching will be worth it. Promise.

What About You?

Hey investors, what’s the hardest part of pitching to other investors and why? What makes them say ‘yes’ to a deal? Share your tips and tricks in the comments below! 


Do It To It! Immediate Action Steps

Don’t be vague (no matter how enthusiastic you are).

Prepare the specific details of your deal and be ready to discuss them.

Be realistic and honest about the details.

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