Scott Carson explains the simple formula that you need to know when considering how much private money you can bring in.
While sending your contacts emails, make sure you’re providing them with content and are building rapport as you go along.
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.
Scott: Hey, everybody, Scott Carson here, from weclosenotes.com, and I’m excited to be the guest speaker on today’s REI classroom. And today’s topic that I’ll be focusing on is what I call the private money formula.
Mike: This REI Classroom real estate lesson is sponsored by theinvestormachine.com, FlipNerd’s private investor coaching program and your blueprint to investing success.
Scott: All right. Now, what do I mean by the private money formula? Well, everybody, we’re all looking for private capital. I don’t care who you are, whether you’re Scott Carson, Joe Blow, Warren Buffett on Wall Street, everybody’s looking for private capital, not only to do deals, but to grow their business. So, I don’t care if you’re sitting on a chunk of cash, at some point you’re going to use up your money, and need to go out and raise private capital.
Now, the private money formula is very simple, all right? You take everybody that’s in your database. If you’ve got 500 people in your database on LinkedIn and Facebook, and you’ve got them in a database like a spreadsheet, or in MailChimp, or Podio, or something like that that you can access, take that number, so say 500, and multiply that times $1,000. The number that it gives you, in this case will be half a million. Well, that will be the amount of private capital that’s probably sitting untapped in your database.
Now, you’re not going to tap into it all, all right? Totally, and some people are going to be worth more than $1,000, but you’re going to have an average of at least worth about $1,000. One person may be worth $10. You may have nine duds, who knows? The older you are, the bigger your database is, the average per person goes up too, so keep that in mind.
Now, when you’re reaching out to your database, all right? You’ve probably heard the tried and true quote from Tom Hopkins that 80% of sales are made after the fifth contact, all right? It means you’re going to need to reach out to your database at least five times to tap into the 80% of that money.
Now, a little unknown fact, what’s known of your market quite a bit, is that only about 20% of your database will open your email at any given time. That’s notorious across real estate, all right? So, what does that mean? Well, it means, you really are only going to have about 100 people out of your 500 open your email. So that means you’ve got to grow your database, and you’ve got to send out emails at least five times, or some sort of contact with your database, giving them some sort of knowledge. Not asking, but knowledge to have them want to do deals with you.
It’s all about building rapport, okay? So, you have to look at your numbers, look at your marketing. When was the last time you sent an email out to your database? Now, I’m not talking about spamming everybody, an email every day, but honestly, those companies, those investors that send out some sort of great content everyday have the lowest unsubscribe rate. I bet you didn’t know that, all right?
Now, the biggest bang for your buck marketing wise is going to be email. Constant contact, eye contact, email came out with a survey awhile back that said, on average, for every dollar you spend in email marketing, you should see a 4,300/4,400% return on your money. Now, think about that, all right?
So, what am I getting to? Well, set up a five-email series to your database. You do one email once a week. At the end of five weeks you should start seeing that private money rolling into you, because it’s going to take you five weeks to start tapping into that 20% of that private money formula sitting in your database.
So, what does this mean? One, you need to grow your database. Two, you’ve got to market on a consistent basis. And three, you’ve got to give some content. Nobody wants to deal with people like, “Give me, give me, give me.” It should all be a “What can I give you? How can I serve you? Here’s an article. Here’s something about who I am and what I’m doing,” to really help you guys separate yourselves from everybody else that’s not doing anything at all. Trust me, you do a little bit extra than the next guy, will exponentially pay off, not only the deals you close, but the money you raise, especially if you implement the private money formula.
I’m Scott Carson, guys. That’s my guest lesson here on the REI Classroom. I look forward to seeing you guys at the top.
Mike: Are you looking to change your life through real estate investing? If you’re interested in either getting started or taking your business to the next level, please check out FlipNerd’s private program at theinvestormachine.com.
This is the most robust real estate investor coaching, networking and mastermind on the planet and designed for your success. If you’re ready to roll up your sleeves, ready to take personal responsibility for your own success and ready to dive into a world class instructional coaching program that provides you step by step instruction to help you achieve financial freedom, then you should apply today.
Spaces are limited and candidates are only considered after an application and interview process. Our 12-month investor program is unparalleled. Think you might be a fit? Learn more today at theinvestormachine.com.
Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Are you a member yet of FlipNerd.com, the hottest real estate investing social community online? If not, you can join for free in less than 30 seconds and get access to hundreds of off market deals, vendors in your market to help you in your business, and you can start networking with thousands of other investors just like you. Get your free account now at FlipNerd.com.
Please check out the FlipNerd family of real estate investing shows where you can access hundreds of expert interviews, quick tips and lessons from leaders across the real estate investing industry. They’re available at flipnerd.com/shows, or simply search for “FlipNerd” in the iTunes store.