In the work I do as a real estate investing copywriter, I get to meet a lot of investors at different stages of business.
Some investors are “total noobs” (as the kids say… wait… do the kids still say that?) and some investors are so advanced that they’re working and thinking at the stratospheric level. I meet them both, talk to them both, get into their heads, learn their secrets and struggles.
Along the way, I’ve discovered a painless, simple, and FUN way to start a real estate investing business that any aspiring investor can use.. even if they’re stuck in a 9-5 job, have zero cash, and don’t have any deals under contract or in the pipeline. Trust me, you’re gonna love it.
Yes, it is possible. And the best part is, anyone can do it even if you don’t see yourself quitting your job in the near future.
HERE’S THE PROBLEM ABOUT LACK-OF-EXPERIENCE THAT NEW INVESTORS ARE FACING
What do you need when you have a deal? Well, you need money and a deal.
But new investors get bogged down, especially if they have a job and don’t have any money or any deals in the pipeline: They encounter the classic catch-22 of investing — they need money to do deals but they need deals in order to get money.
The money allows them to do enough deals to quit their job and start working as an investor. However, in order to get that money, they often need to have done some deals and demonstrate enough experience for their private investors to trust them enough to lend them money.
This forces new/aspiring investors to stay in their jobs longer while they find the money and try to do the deals (but having a job doesn’t give them enough time to find the money or do deals!)
It’s a very, very difficult loop to break out of, and that’s one of the reasons why there are many more aspiring investors than there are actual investors.
HERE’S THE SURPRISING SOLUTION FOR YOUR NEW REAL ESTATE INVESTING BUSINESS
What do you think your private money sources are looking for when they’re deciding whether or not to invest with you? Put another way, what qualities are they looking for in you that would allow them to invest with you?
Most investors would say that their private money sources are looking for an investor with experience.
However, that’s not actually true. Private money sources aren’t looking for experience. What they’re really looking for trust. They need to know that they can TRUST you. They need to have the CONFIDENCE in your abilities and the BELIEF that you’ll do what you say you’ll do.
Private money investors are looking for trust, not experience. It’s true that experience is part of the trust equation but it’s certainly not the only part.
Trust is built in the following ways:
- Experience (there it is!)
- Rapport between the investor and the private money source
- Alignment of vision/goals between the investor and the private money source
- A clear and detailed plan with contingencies
- Assurances (such as guarantees, control, deal structuring, who owns the title, etc.)
- Knowledge/education level of the investor (does the investor KNOW what they’re doing?)
- Reputation (of the investor as a trusted person)
- Positioning (of the investor AS an investor)
- Confidence in your ability
As you can see, experience is part of it but only one part. There are many other factors that contribute to trust.
And here’s where it gets exciting for the new/aspiring investor: You may not be able to control your level of experience at this point in your investing business but you can control almost everything else!
HOW TO CONTROL THE TRUST FACTORS
You may not be able to increase your experience but you can increase almost every other trust factor.
Rapport can be established through continuous communication.
Alignment is achieved and maintained by communicating your vision/goals and building bridges between yourself and your private money sources.
A clear and detailed plan is one of the easiest things you can put together. And remember: the more detailed, the better.
Assurances seem trickier because you may not be able to offer guarantees (depending on the kind of investing you do and where you live) but you can provide other assurances, like how the deal is structured.
Knowledge/education is one of the easiest to acquire. Just keep reading, studying, learning, and getting coached, trained, and mentored. Don’t ever stop.
Reputation doesn’t require experience — you can get lots of people to share that they think you’re trustworthy, diligent, and hardworking. Find someone you’ve done business with in the past and get a testimonial from them. (Oh, and your credit score is also a form of reputation — that may play a part as well in showing your private lender just how reliable you are).
Positioning is the idea that you provide some kind of unique angle to the market. Your position as an expert in a particular type of investing (with your expertise based on education rather than experience) will help you. Branding is an important component of positioning.
Confidence may surprise you but it’s important. When you talk to your private money sources, they’re looking for someone who is confident. Your lack of confidence, rather than your lack of experience, may hurt you. In fact, I’d venture to say that more money goes to inexperienced investors with confidence than unconfident investors with experience!
BUILD TRUST INTO YOUR BRAND, MARKETING, AND BUSINESS… INTO EVERYTHING YOU DO!
Since your private money sources are looking for trust, not necessarily experience, you can control many of the factors that will contribute to trust.
Here’s why I’m talking about this: Many of those components can be built into your brand, your marketing, and your business. For example, your positioning should be evident within just a few seconds of someone encountering your brand; your reputation (via testimonials) should be peppered throughout your marketing; your knowledge and your confidence should ring through in every website page and blog post and email you write; your rapport will be evident through every interaction you have with the private money source.
Here’s what to do now: Get a piece of paper and write down those trust elements I’ve talked about above. Then, start listing what you can do for each one. Aim to create 3 to 5 ways to build up each trust element. Before you know it, you’ll have a whole bunch of trust-building tools in your toolbox.
You won’t need experience because you’ll have a ton of other reasons why private money sources should invest with you… but before long, you’ll also have the experience to go along with it!