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how to find private investors for real estate

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If you don’t have a lot of money, and you don’t know anyone with money, you’re probably asking yourself how you are going to find investors.

Where do you go to look for investors?

Where do you begin?

How to Find Private Investors for Real Estate

The short answer is, you have to start right now where you are.

Right now, you have a sphere of influence around you.

This means your friends, your family, your co-workers, the people you encounter in your day to day life.

Create a mind map

The best advice I can give you is to go sit down right now with a pen and paper and create a mind map – take notes of all the social groups you’re a part of – your neighbors, your teammates, people you know from church – everyone. Draw bubbles representing all of your organizations and list the names of ever person you know in these groups.

I promise you, you will be surprised how many names you come up with. It’s easy to list 50-75 names. So, that’s your starting point. Focus on those names.

You’ll want to get the idea of raising money out of your head because what you’re really doing is building relationships.

Let’s say you go to a Boy Scout meeting. Instead of shooting the breeze, talking about sports and weather and politics, talk about – and share your enthusiasm for – real estate.

You might say something like, “Sam, you're not going to believe what I’m learning about apartment buildings. It’s really cool – this one property I have is giving investors a 10 to 15 percent return. It’s really exciting. Do you know anyone who might be interested?”

You’re talking to them about what you’re doing, but not asking them directly.

They might say, well my boss is interested, or my brother-in-law might be interested. In other words, you get referrals fro people while building relationships with people.

Cultivate relationships

And you have to think about where you are in your relationship.

If you’re at work and your boss knows that you already have a couple of rental properties and you talk to him about multifamily investing, it’s not a stretch at all. On the other hand, if the person you’re talking to has never known you in a real estate context, you don’t want to walk up and say, “Hey do you want to get in on this deal?”

Slowly, but intentionally, build the relationship to the point where someone would be receptive to hearing what you have to offer.

So, create your mind map and reach out to those people.

Track them in a spreadsheet and become more intentional in the way you communicate. Be relaxed about what you’re doing.

You’re sharing your enthusiasm and if someone then shows interest, they might want to meet with you and talk about a sample deal. Use it as a conversation piece. The investor then gets to talk to you and ask all the big questions.

This gives you the opportunity to share what you know about multifamily, the risks and the returns. Once your investor is comfortable, they’ll give you a verbal commitment. You stay in touch with them, so you’re ready when you have a real deal. You’ve already answered their big questions.

Grow your sphere of influence

So, use your sphere of influence to find your investors, get referrals from them, then get referrals from those people. In this way, keep building out the layers. People you know is your first layer. The second layer is referrals. The third layer is people you don’t yet.

Meet those people at networking events and meetups and Chamber of Commerce meetings. Any sort of networking event can expose you to potential investors.

What you’re actually doing as you make these connections and have conversation is creating a brand and building trust.

With this approach, you’ll find investors from the very beginning of your journey.

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