How To Get A Series Of Yeses

Mike: Welcome back to the flipnerd.com REI Classroom where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Michael: Hi there, and welcome to the REI Classroom. My name is Michael Blank, and I’ll be your instructor today. To this episode, I’m going to teach you how to get a “Yes” from investors when you’re raising money for your next multifamily deal.
Mike: This REI Classroom real estate lesson is sponsored by theinvestormachine.com, FlipNerd’s private investor coaching program and your blueprint to investing success.
Michael: If you follow me for any length of time, you know that I’m an advocate for multifamily investing as the best real estate strategy to help you replace your income in next three to five years. And one of the main ways to do that and necessary ways is to raise money. This one is specifically on getting a series of “Yeses” from your potential investors.
Here’s a mistake that many make that leads to an immediate dead end, and that’s very frustrating to a newbie just starting out. They’ll say something like, “Hey, Frank I’m getting an apartment building investing, and I’m looking for investors. The minimum investment is $25,000 and you can get a 10% to 15% return on your money, are you interested?”
The problem with this is, it’s too direct and will likely lead to a “No” but then becomes a dead end. And that’s because the person that you’re talking to may not even know you or they may not know you in the context of real estate investing or they’re simply not warm to the idea of you asking that kind of direct question. You have to approach each person uniquely based on what your relationship is with that person.
The point is this. You want to get a series of “Yeses” from a person until you get to the point where you can ask that kind of question, all right. So you have to use a little bit of judgment, and you have to be patient. I know you want to raise money in the next 30 days but depending on who is in your sphere of influence, you have to warm up that person appropriately. In general, you want a series of “Yeses” you want to continue to expand your circle of influence.
Here’s a better way to get a series of “Yeses.” So I going to give you an example here of speaking with Frank who may not actually know you in the context of real estate investing. All right, so here’s what you can say, “Hey Frank, I’m getting into apartment building investing I’m really excited, and it’s really going to change my life and my family and my financial outlook. I think I can probably retire and replace my income next three to five years. Would you mind taking about five minutes so I can tell you a bit more about it, I’d really like to get your feedback.”
Now, you’re speaking with let’s say an acquaintance, all right? Now, if you ask him for five minutes to get your feedback, what are they going to say? They’re going to say, “Yes, of course, my gosh, I haven’t talked to you in a while, why don’t we do lunch?” Or they’ll at least agree to a five-minute phone call. So really ask the person on the other end what you think is a 95% likelihood they will say yes to, and that’s what you want to ask him. That’s an example to do that.
All right, let’s continue this on a little bit. So let’s say that they agree to “Yes” and let’s say they do a lunch. You might say something like this, “Hey, it’s pretty cool.” Here’s actually . . . When you get in this conversation, they’re saying, “What do you need right now, what are you looking for?” You say, “Well, I’m looking for buildings of about 15 units. I’m going to buy with investors and the minimum investment is $25,000 per investor, and the returns are X. They can invest with cash, but they can also invest with IRAs and 401Ks. Would you happen to know someone who might be interested in a five-minute phone call or talk about this more?”
And again, you’re not actually . . . At this point, even you’ve warmed up the conversation, but you’re still not asking them directly. You ask them, hey, is there anyone they know who might be interested in a reasonable return. And all you’re asking for is a five-minute phone call. Now, what could happen is they might say well, “I’m interested. Are you kidding me? Come on, talk to me about this stuff.” So you might now have a potential investor in open. Or they might say, “You know what, my dad has been invested in a rental property, he might be interested in talking with you, or my brother,” or whatever. And so you’re asking him again a question at this point where you think there’s a high likelihood or at least a potential likelihood for a “Yes.”
The point is this. Always ask questions that will get a yes and move the conversation along. And also keep in mind that you’re not always . . . Yes, you’re looking for money, but you’re looking for other forms of support. You’re looking for someone . . . Maybe you’re looking for a member for your advisory board or an advisor. Maybe this is someone who’s got a lot of entrepreneurial experience, “Hey, would you be an advisor for me? Can we meet once a quarter?” That’s great, “Hey, I’m looking for a real estate attorney, know someone?” “I’m looking for a lender.”
You’re always looking for support of one for form or another, and it may not always be money, it could be a referral. So always ask questions that with person normally wants to try to support and if they can they will.
Now, here are some rules to remember as you’re reaching out to potential investors, okay. So don’t discriminate against anyone. Number one is you don’t know if they have money or not and you don’t know who they actually know. Remember, you’re always looking for multiple things, you’re looking for money, looking for deals, looking for people. So you just want to basically share your enthusiasm with people and tell them kind of roughly what you’re looking for, and maybe they know somebody. So always talk to everyone, always ask for referrals.
So like I said, you’re not just looking for money, but you are looking for potential investors, always get referrals then follow up with every referral. It’s terrible, number one, is not to follow up, so always follow up. And number two, close the loop of the person referred saying, “Hey man this was a great referral,” or, “Hey, I met with so and so, it didn’t work out. I really appreciate it, do you know anyone else?” It gives you another reason to contact that person.
And make sure you track your activity guys because there’s a lot of stuff going on here. I always say, make a mind map of your potential investors and then start tracking your interaction with them. When did I speak to Tim last? Or when did I email him last? What did I say? What’s the next step? Because for me once I get above three it starts becoming a blur.
So just track some of this stuff and be very systematic, consistent, and intentional. So think about raising money not so much about raising money, “Oh, got to raise the money, raise the money.” Think of it more as networking. Really think of it as networking. Networking is really the intentional act where you’re establishing relationships with an intention behind it, which is to get them involved in your real estate investing business whatever that may mean. And it may mean raising money.
So treat everyone, whatever level your relationship is, is how you want to approach that person. Again, your goal in your mind is to get a series of “Yeses.” Okay, that’s it for today. If you have questions, the best place to ask me questions is at Ask Mike which is at themichaelblank.com/ask. So I appreciate you taking the time out of your busy day to learn with me, and I will catch you next time. All right, take care.
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