Marketing Is KEY to Raising Investment Capital (Investors Round Table)
When you're looking to raise capital for real estate investments, your marketing strategy is key. The way you present yourself, your team, and the project can mean the difference between bringing on new investors and closing out the raise or failing to get the project off the ground. Today, we're diving into the tactics that we use to market our companies and our projects so that we can continue to build our investor list and raise equity.
Brian Adams, Excelsior Capital
Dave Codrea, Greenleaf Property Management
Logan Freeman, FTW Investments
Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Launch Pro: www.crelaunchpro.com
Key Takeaways:
Marketing is crucial for commercial real estate investors to raise capital and find deals
It's important to determine your target audience and understand their perspective
Building trust and credibility is important, especially without a track record of success
Consistency and quality are important in marketing, not just quantity across many channels
Telling your story through various mediums like photos, videos, newsletters is effective
Offering memorandums should clearly convey opportunity, team, risks, projections to investors
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
Episode Transcript:
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This episode of the commercial real estate investor podcast is brought to you by cre launch Pro. This online commercial real estate program is designed to take you from beginner to pro commercial real estate investor with access to all of my courses, our online community, and monthly group coaching calls. Learn how to confidently buy your first commercial property today at www dot c r e launch pro.com.
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Welcome back to the commercial real estate investor podcast we are back today in the studio last week, if you guys tuned into my office hours I was out in Milwaukee. So nice to actually be back in the office, we're gonna be diving into marketing, as a commercial real estate investor as a deal sponsor, is it important, we'll be covering the fundamentals of marketing for raising capital, talking about building trust and credibility with your investors, and crafting pitch decks that sell. I think that marketing is incredibly important. It's a mind shift that we had several years ago where I decided, You know what, we need to start treating ourselves like a marketing company first and not just a commercial real estate firm. But guys, what do you all think is marketing? Important? In today's age, as a deal sponsor Logan, I'm gonna kick it over to you first. Yeah, let's define what marketing really is, which is the activity of our business of promoting or selling products and services, right. And that can include a lot of market research, and advertising. But I do believe that, that if you're not willing to understand marketing, and selling as an entrepreneur, then that's probably not the right business for you. Or you have to find a counterpart that lives and breathes, communicating and advocating for your business. And the thing that I think a lot of folks fall into the trap of is, you know, hey, I'm going to do real estate, I'm going to do real estate deal. That's great. You should be a fantastic developer operator financer, all of those different components. But if no one knows about you, or what you're doing, it's going to really hinder your ability to to actually effectuate change and have any momentum in your business. And so, I'm glad that this is our topic today, I'm not going to steal all of the mindshare, but I am a sales and marketing guy. Because back in my MBA program, you know, we had a general MBA program. And it was, this was before the entrepreneurship program was actually available. And it was really, you know, learning statistical regression analysis and understanding charts of accounts with accounting, which I think can all be helpful, but it was all very much book heavy, and, you know, back office type of, you know, activities. And so, I ended up taking a marketing class to that MBA program. And I was like, you know, we read, I think it was the Purple Cow by Seth Godin. And that really opened my eyes to saying, Okay, this is really business, this is being able to communicate, so I think marketing, and communication and sales, now more than ever, while the competitive landscape is is more, you know, influenced by what people see. And there's so many, so many more. You know, folks out there is so important. And so there's so many different ways to take this conversation, but I can't harp on it enough. I think that being able to know who you are, and how to communicate that in a clear, concise and compelling way, can be really rocket fuel for your business. I couldn't agree more. I mean, that's what's gonna make today's discussion so much fun, because you guys are all crushing it in this arena in different aspects, right. There's no one way to market, which I think makes it fun. If you're listening on the podcast, by the way, we're joined by Logan Freeman at FTW investments, Dave Comadre, at Greenleaf and Bryan Adams at Excelsior capital, Brian, I'm gonna kick it over to you.
3:55
Yeah, I would echo everything Logan said. It's hugely important. If sales is the exchange of one person's resources, time and money for a widget.
4:09
You know, marketing is telling your story to enable a sales call to happen. And in a world where it's very noisy, and it can be very hard to distinguish yourself.
4:25
I think people resonate with stories and narratives more and more. And if you aren't willing to put the resources to work on your marketing, and I think Logan nailed it. For us. It was a conversation internally where I told my team, we are now a media marketing sales company that happens to have a real estate component to it. And everyone has to get on board with that and get comfortable with it. And we have to tell our story to everybody all the time, everywhere.
5:00
across different mediums and different channels, because you don't know what's going to resonate or when it will.
5:07
Unless you make that decision, it's going to be really hard to raise capital and to find opportunities and find deals. So it's key, it's crucial. The nice thing is I think most operators and sponsors, even a number of larger private equity funds are terrible at marketing. And so if you take it somewhat seriously, you can be a top decile operator in the space.
5:34
Yeah, I couldn't agree more, I think, you know, when it comes to this business, you don't have to be the best, right? I mean, that used to be the way that these groups would get their name out there, you'd be, you know, top 10 private equity firms in the country in terms of your your returns, you'd make some sort of West Wall Street Journal, New York, you know, the New York Times, they would all read articles about you, and you get a flood of investors and your reputation would help carry you into the next round of investors. And today, it's more about who's better at marketing. It doesn't matter how good you are at doing these deals, if people don't know about you, I think it's, it's really, really, really important. Dave, let's kick it over to you. What are your thoughts on it?
6:14
It's definitely important to not only tell the story for how you're going to attract investors, but your team is critical in getting that done. So the better story that's more accurate of who you are, and what your values are, as an organization out there, you're going to find the people that are best for you.
6:32
It's got to be part of
6:34
anyone that's on the capital raising front, especially on the syndication side. That's right, because you're equally wanting to attract and detract investors, right, there are plenty of investors that you actually never want to work with. And by telling your story, you'll make sure that you don't have to deal with people that are going to kick the tires or try and tell you what you're going to do or you know, do stuff that you don't really want to be doing. Let's let's dive in, before we get into the the actual specific marketing channels that you guys all really focus on. That helped bring you clients. What do y'all think are the bare fundamentals today? The fundamental elements of marketing strategies and building a personal brand for deal sponsors? Brian, I'm gonna I'm gonna start it off with you. Is it is it newsletters? Is it a LinkedIn profile?
7:21
Yeah, I think that's two of them. Right. So I think a really,
7:27
you know, a basic, decent user friendly website goes a long way. I think you need to have some type of monthly newsletter, or some type of thought piece that you produce on a regular consistent basis. And you need a social media presence.
7:48
In our business in the syndication world, people invest with people, they don't invest with brands. And so the brand is important. And you've got to have, like I said, the website, and you've got to have a good looking image and all that. But ultimately, your personal brand is going to be what really kind of attracts like minded individuals, again, people invest with people. And I think a big mistake that a lot of early entrepreneurs and sponsors make is they want to outsource that component. Right, they want to bring in a third party marketing person or third party salesperson. And the reality is when you're starting out, if you as the founder or not the Chief Marketing and the chief sales officer, you will fail. Because nobody can tell your story as well as you can write. And even if there's 1000, a million people on LinkedIn, talking about syndicating real estate, you don't know what frequency your audience is operating on. And different people respond differently to your story. So you just need to be really tight on who you want to work with, what your value proposition is to them, and then get them to come into that top of the funnel, then where you can nurture them, provide value to them, and then ultimately present them with an investment opportunity. So I think, to go back to your question, a basic functional website, some type of consistent, regular thought piece that you provide your own personal commentary on. And then today, it needs to have a social media component to it. And that can look a lot different ways to different people, depending on who your avatar is. But those are the three starting points for sure. Before we jump on to the next person, you brought up a point that I get questions on all the time that I think it'd be interesting to hear hiring third party capital raisers. Somebody else is gonna go out there and find investors for you. What are your thoughts on that? Because it seems to me like that a lot of people think that that's an easy button, right? Oh, I'll just hire somebody else. I'll pay them 3% To go give me equity, but it's never worked out. Yes.
10:00
There's a lot to unpack there. First off, wouldn't be very careful. Marketing is not sales, right? There are two different functions. I think you can have a third party marketing group that helps you with your branding with your imaging with your personal brand. constructing your website, putting together your content calendar, helping with social media. There's some great third party groups out there, I worked with one for years, we then brought it in house. So I'm a believer on the marketing side. And we could get into kind of, maybe it's a question for later the show about kind of what to do what not to do when you bring in a third party group. When it comes to sales, you have to be really careful, because there's a lot of legal liability implications there. So depending on what exemption you're operating under, or if you are operating under an exemption, under reg D.
10:54
You've got to be careful about what licensure that person has, if they're operating as a broker dealer, or if they're not, if they're if they are, are they a member of the general partnership? Or are they not? Right? So I don't give legal advice anymore of retirement license. But there's a lot that goes into bringing in a third party capital raiser from a regulatory compliance legal perspective. What I can tell you from my personal experiences in our world, right? Can retail investors 50,200 $50,000 million dollar investor,
11:31
nobody is really going to be good in that world, in my experience and opinion, unless they want to retainer.
11:40
And I don't do retainer deals. So we only worth work with success fee oriented people, they have to be licensed, they have to be regulated. And we run a lot of background and diligence on them. There's a lot of people out there cowboy ng it, who don't follow the rules appropriately. And you gotta be really careful because you don't want the SEC and FINRA to get into your business on that. It's really scary. Yeah, the only time that we've ever brought in a third party member to help with a capital raise is somebody that I've already had personal experience with that I've seen raised capital on their own deals, and they want to partner with me on another deal. That's the only way I've ever seen it work. You know, a lot of these equity guys, they'll make a bunch of promises, they'll even if they do a success fee, they won't guarantee their success. And then you're you're basically beholden to them, which is not really a good spot to be at when you've got 30 days to raise capital. Just never never fun. Dave, what are your thoughts on the fundamental elements of marketing strategies and building a brand today for deal sponsors?
12:46
If you look at it from a purely the capital raising component there, our experience, we've done everything in house, I've always done that in house and my firm, we've never partnered with anyone or or had a third party do it. But you know, I'm, I haven't used them. But the registered investment advisors has, I mean, it's a viable business strategy and approach and I haven't used it but I know groups that have used those individuals and been successful with it. So there's, I think there is that path to it. But ultimately, your your marketing approach and your sales approach. And again, two different things, as Brian was saying there, they've got to match to what your values are, and how you plan to operate. And what you're going to do long term because you gotta be able to tell people a story today that sticks with your story five years from now and continues with your, your brand and your message. So there might be a place for it, though, in whatever kind of organization someone's trying to look to build those, those registered investment advisors certainly provide value and input.
13:47
In many cases. Yeah. Yeah, I would agree. That's that's something that I haven't looked into that I'll have to check out. Logan, what are your thoughts?
13:55
I think the fundamentals on the investor framework and lifecycle start with the Analyze
14:04
portion of the funnel. And this is this is goes in a different a couple different directions, but you go from analyze, to position to architecting, to executing to iterating. And when you're analyzing, it's not just analyzing yourself or the avatar, but really you have to analyze the competition. The investor needs yourself and the market as well. And so what I try to do on a regular basis, this is on an annual basis is really get back to the SWOT analysis and understand strengths, weaknesses, opportunities and threats and trying to figure out where we should position ourselves dependent on where the market is currently. Because we are not just doing one asset class. We have to be a little more broad in this scenario, but I think understanding that analyzing the competitors you're the market, the investor
15:00
Here's that you want to target. And then your firm is extremely important. I think some folks do competitors marketing, and their avatar from their investor standpoint pretty well. But then I think they kind of forget about analyzing your firm. So why does your firm exist? And what is the creation story behind it? What's your unique ability? What's your number one area of strength? And how does that relate to your firm's unique offering? You know, you have to work through all of those questions. And so, I think that a lot of times, you'll get 15 to 30 seconds with somebody if you're at a networking event. And you really need to be able to communicate what you do, why you do it, and how you do it in a way that somebody is not too heady where somebody might lose you, but appeals to that person's potential ability to be working with you in some capacity. And so I think telling that story, one really helpful resource that I went through was, I read Donald Miller's book, I don't remember what the book was called, somebody helped me out maybe brand building a story brand, building a story brand. He's a Nashville guy, right. And so he's built this free tool for anyone to go online. And to actually create a winning story brand brand script. And so the easy framework, or the high level framework is a character has a problem that meets a guide, who gives them a plan, and calls them to action that either ends in success, or that helps them to avoid failure. And so on an annual basis, I'm going back into this brand script and saying, Okay, how is our firm change, how's the market change? How is our how our how of the deals that we've done change and what we're focused on changed and rewriting this brand script, at least to have as an internal document. So the folks that are communicating to vendors, residents, businesses, investors, potential other Capital Partners, are on the same page with that, because like, like Brian said, nobody's going to tell that story as good as you. And so you have to be able to dial that down. I mean, trying to have my Investor Relations Team tell the story of how Parker quarry and myself came together our diverse backgrounds, why we, why we do what we do, and how we do it, that can be a 30 minute conversation. And so I've dialed that down into three or four sentences, and I make sure that every employee that's out there, or a team member that's out there,
17:26
you know, communicating to the outside network is, is on the same page with that. And I think that's extremely important. I think I read some book that said, even the receptionist at the business needs to be able to tell the story. And if it's really complex and scary to try to remember, it's gonna be really hard to do. And so that's, that's kind of my framework of how I try to analyze this on a regular basis. And then I think getting real humble and honest with yourself about what you can do right now, in today's market is another, you know, extremely important aspect of this, because, yes, sales and marketing, extremely important. Yes, they are two different facets in my brain as well. But you know, just being a really good marketer is going to be a tough business to be in, because you're not going to keep those clients, I mean, you are selling a service and an investment opportunity. And the opportunity is one component of that. But the other part of that is customer service. So, I mean, as a real estate entrepreneur, you're in the multimedia business, which includes marketing, you're in the sales business, and you're in the customer service business. And if you have a lot of team members, now you're in the HR business as well. And so there are other people that I know, that are out there as one woman and one man shows doing it really well. And they play mostly in this space of marketing. And in garnering eyeballs, which is really important. And then partnering with operators in the space. And so you need to figure out as an entrepreneur, what what do you want to do in your business? And so the other tool that we've used, and we have these, sometimes mind numbing, four to eight hour meetings is traction, you know, the book from Gino Wickman. And really understanding what is the 10 year vision? What is the three year target? What's the one year target, what's the quarterly target, and then having rocks to actually go implement on a quarterly basis for those so and I'll tell you this, this the last thing I'll say on this front is I can't tell you how many times I've had that conversation with investors more than about the deal. What's your structural capital look like? What's the relational capital? What's the human capital look like? All three things that aren't necessarily real estate focus, but it's what's your vision? Where are you going? What tech Are you utilizing what systems and controls do you have within your business? I mean, we're talking about millions and millions and millions of dollars, changing accounts and
20:00
And distributions and taxes and financials. If those controls on all those parts aren't tight, I could tell you, you know, investors are gonna get pretty scared in a pretty quick fashion. So those are all things that I think are very important. And I've utilized and I even posted about this on LinkedIn, you know, what makes FTW different? You know, I mean, I think that's what we're always trying to communicate and human, you know, human capital, structural capital and relational capital all filters up to your intellectual capital as an owner of the business. And if that's not growing, neither is your investor base.
20:37
Yeah, Edwin's jumping in the live chat saying he's currently reading books on how to raise capital. He said, raising capital by Andrew Sherman is a pretty good book, good read so far. Logan, building a story brand great reference there. That was such a phenomenal and pivotal book for me. And putting my business together. In fact, I used that exact framework to put together my website, which was the very first iteration of marketing that our company ever really had. And I love the way I mean, the metaphor that he uses is you're not Luke Skywalker, you're Yoda. Your customer is Luke Skywalker, make them feel like the hero of this story, and structure, everything from that perspective. And it's just, uh, I loved that metaphor. I was like, Man, I'll never forget that. So, you know, props to them for to Don Miller for putting that together. And then talking about, you know, engaging your employees and your story. I heard the story this past week, when John F. Kennedy was was touring the Space Center. You know, back in the 60s, he saw a man sweeping a floor. And he walked up to him. And he said, Sir, what are you doing here? What's your job here. And the janitor said, I'm helping put a man on the moon. And to me that just gets right to the core of every single person has an incredible and incredibly important role in what we're doing today, no matter what you're actually accomplishing on a day to day basis, because it's helping us put a man on the moon.
22:07
So when we first got started on the marketing front, we started off with, like I said, the story brand website. I then expect I then kind of expanded my blog, started writing a whole bunch there. Then we moved into the YouTube channel to the podcast, and I'd had Instagram going probably before that. Well, before that. Instagram was always really good for me, but what specific marketing channels are you all using now? And tell tell me walk us through the iterations of what it looked like. Because I know, it's next to impossible to start with everything all at once. But that's what a lot of people think that they should be doing. I need to start a podcast, I need to start posting on LinkedIn, I've got to start a blog. I've got to start a YouTube channel. I've got to do all of this. But it's just unrealistic. Dave, I'm gonna kick that one over to you first.
22:51
I would say our first like, real effort into marketing. It wasn't even really a website, it was our investor report, like what are we going to send out every quarter to someone who has
23:03
already given us a few dollars, we wanted to make sure that was as transparent and clear as possible, and that they were able to then share that with other people. So a lot of our leads are coming from referrals, because they're like, Hey, I invested with this group. Here's the information, they provided me the story that they're, they're executing on, and they would share that with other people. And that was, again, that was starting like 15 years ago was focused on how do we provide that clarity, so that that story can be shared with other people.
23:32
That was really the impetus of what I would say was a marketing but really was a financial report that turned into how we provide information clearly.
23:41
You know, since then, you're constantly trying to find new ways to share that information and share that story. But it's got to be something you like doing if you don't like writing, don't start a blog. Or if you don't like talking for a little bit of time, don't do a podcast, like you've got to find like, which one is it that you gravitate towards and use that channel. It is not you. And you've got to it's I don't know Logan's talk about this too. It's hard to bring other people into go do it for you. So you've either got to
24:09
like it or find a way to get better at it and train yourself and like it because you're going to need to have some of these avenues. I think that baseline for what's expected to be out there is is just a lot higher now. There's very few groups out there that have no information you know, maybe that's possible.
24:25
I don't know anyone that's done that that has no information out there and is successful at this game. But it's not to be it could be been done maybe that's all I don't know about it. But that baseline is pretty high and having a good website having a good presence. LinkedIn, be on something that you know, some kind of social media aspect out there that's more educational and giving versus trying to receive the whole time.
24:50
Yeah, what else are y'all doing today? Dave? Cuz I know. You know, I came down to Atlanta for an investor like summit that you guys had that was a lot of fun and it was really enjoy
25:00
ageing, we had some tricycle races around the parking lot, they got a little scraped bloody there for a little bit, which is a lot of fun. Obviously very competitive, you got up a whole bunch of type A guys racing against each other. But what else are y'all doing today to engage your investors, we're we're trying to find opportunities to bring people together that wouldn't normally interact with one another in an in person environment. So you're kind of knit at the bottom of the funnel almost with that approach, right? Like you're sending your information out to a wider group. But we're trying to find eight 910 things a year, we can do that, or a unique experience where investors can come they can meet each other, they can meet people on our team, or, I mean, they can also meet our attorneys and accountants and kind of see behind the curtain of how everything works. And that's where we feel like we have the best connection with people and even myself and my team.
25:53
We prefer interacting in that environment. So we're going to, we're going to push our marketing efforts to be able to get people together, and have an experience together when that's what we like doing. And it fits naturally for us. So that's really our drive. Yep, we did a tricycle race on that we've got an event coming up on October 25. I think what we're doing
26:14
X verse hatchet demonstration, because we've got a big office demo that we're doing. So we're doing an event, where you get to meet some of the tenants that are there, and then see the space that's being torn apart, and they're gonna get to literally take a swing at it, and see how it goes. But so it should be pretty interesting. And it's definitely a more unique experience that you're getting from, most times you invest in something. Yeah, it's a lot of fun, you'll do a much better job than most, most other deal sponsors I see out there and actually gathering people together, and doing fun and interesting things. I bet your insurance guy absolutely hates you, though.
26:52
As soon as he got that, when he called me he's like, What are you doing? Why does it say you're throwing axes at the wall? I was like, Well, yeah.
27:01
You know, don't worry about it. That's right, Logan, Logan, what are your thoughts? Well, I think you got to break it down into the modes and the mediums that you want to be marketing on, if you're not doing anything, currently, what's the fastest path to success? And what's the easiest and cheapest way? Well, I mean, that's LinkedIn and social media. I mean, there's no nothing stopping anybody from you know, me while we're doing this live, webinar and, and podcast to bring my phone out and start videotaping myself. And then using that on Instagram, right? I mean, so in LinkedIn, last time I checked, there's a free version that you can post on on a regular basis. Pretty sure there's free Constant Contact or MailChimp, newsletter, so software's that you can utilize. And so I think just the act of consistency with whatever is going to be the least path of resistance for you right now is where you should start. Before that, find your voice. And I had a coach on this, probably four years ago, needing to find my own voice that was unique and different. And didn't just repost and say the same things that everybody else was saying, I think that's extremely important. So use your life experiences that you've had up to this point, to make your own unique voice come through, because like Brian mentioned, people invest with people, not with brands, you know, we're not, it's not Apple here that we're talking about. And Apple versus, you know, Samsung, whatever it is. And so I think that's really important to understand.
28:42
I have found that, you know, without having a team and resources, it gets very daunting, very quickly, because you feel like you need to post every single day, what I would say, is fine once you can be consistent with but quality does matter. And especially for accredited investors, because, you know, I think that a lot of folks will have seven to 10 sources of information, and the Wall Street Journal is always going to be one of them. And you're not going to, you're not going to remove the Wall Street Journal from your investors pockets. So you have to become that next source of trusted, reliable information that puts some sort of spin on it, that might be beneficial for them to read. And that's, that's extremely important to get somebody to actually open up an email and read it, right. So I think finding your voice and making sure that you understand the topics and the conversations that investors do want to have and tailoring your message around that. And look, I'm obsessed with personal development and reading. And so I had a I had a capital raiser that was extremely successful. I've been doing it for 35 or 40 years not in real estate, but in the oil and gas and energy business. Kind of do a review
30:00
You have my LinkedIn, I said, Hey, I'm trying to reposition myself on LinkedIn. And he, you know, took seven days saw what I was posting. And he's like, Hey, I think that what you've done up to this point, which is rely on your life experiences and where you've been and where you've come from has been really important. But you've been at this thing for six or seven years now, it needs to start being about the results of your business, the thesis around what you're investing in, how you're going out and doing that, what's your unique abilities, outside of just you as a person. And so most of the content now is 20%. Still my, you know, fitness or reading that I'm doing, but 80% is trying to be taking that information and tailoring it to what FTW is doing on a regular basis. So again, reinventing that voice that I'm continuing to, to find in and really tailor for myself has been extremely beneficial. So blog that we have is highly read. And I think people love that blog. And that's part of what we do on the marketing side.
31:02
Investor reports extremely important, we share those quite a bit. What's in those and LinkedIn posts for me is kind of my number one place to be at, it's easy for me, I find that I can grow a following. And I actually can move people from just lurking on posts to actually getting into the DMS. And so I have not spent a lot of time on Instagram, or Facebook. But I have on LinkedIn and just trying to master one or one of these platforms to try to understand how to continue to generate lead flows on them is really important. The last thing I would say if you do have the resources on this front, you know, when you do a piece of content, make sure that it's broken up and it goes to all of your different platforms. But you can become a spammer as well. You know, it's like, okay, you know, Logan's got yet the six posts today on LinkedIn, like that's probably not going to have somebody, scroll stop on that thing. So there's a fine balance. I'd love to hear Brian's kind of feedback on this. And Dave's between Omni presents, which is quantity, or just the quantity of platforms you're on versus the true quality of the content that you're you're putting out and I think there is a fine balance there. It's just kind of tough to figure out. Yeah, absolutely. I mean, that was a good takeaway that I had from Gary Vaynerchuk. You know, years ago, a lot of his stuff I disagree with, because I think that he he's all about, like, just get out there and do it and not actually giving anybody actionable steps to get out there and do it. But repurposing content, if you're, if you're writing the blog, you might as well take a couple of snippets and throw them on Twitter, take a paragraph and throw it on LinkedIn, you know, I mean, you're already creating the content, you might as well share it in different ways. And going back to what you said earlier with with the hook and bringing value to the investors, that was one of the first things I learned as a commercial real estate broker, if you're gonna be cold calling people lead off with, hey, this building down the street from you just sold for you know, X, you know, let me tell you, you have time for me to tell you about it. Because a lot of these investors, everybody wants to know about that, right? So it totally changes it reframes the conversation, don't just make contact with people just to stay in front of them. Always try to bring some form of value to them, so that they anticipate and look forward to reading, you know, your next piece of content. Brian, what are your thoughts?
33:24
Yeah, I think everything you all said, is very kind of germane. And should be taken seriously. What I would start with or when I talk to people who are just getting into the business, as I tell them to really focus on who their ideal customer profile is, like, get your ICP down really tight who your avatar is, and then spend all of your time where that avatar spends its time, right. So for me, my limited partner, you know, potential investors. They read the Wall Street Journal, they read the New York Times, they listened to NPR, they read the economist, and they probably watch MSNBC and Fox News, right. And we've gone pretty deep in terms of zip codes, where they live within certain markets, what schools their kids go to what schools they went to what country clubs, they're a member of where they go for fall, break, spring, break, Summer, etc. And I think if you go deep enough into that world, you will start to really understand what keeps them up at night. And if you can help address that fear of what keeps them up at night, you become a trusted resource for them. And you can provide value to them. So like Logan said,
34:49
if you can
34:51
create something that helps solve a problem that they have,
34:57
that's when you can start that conversation.
35:00
But you can't be all things to all people I think a big mistake people make is they want to have a $10,000 investor and $100 million investor. But the challenge is the the problems that a pension fund has are much different than the problem than,
35:16
you know, an unaccredited investor has it just the reality, right. And so you've got to really understand your ICP and your avatar. And then once you do that, you consume the same experiences and media that they consume. And you can still you can figure it out very quickly from just kind of doing a news aggregator or reviewing the periodicals that they're reviewing, saying, like, okay, these three things have come up every day, for the last month, it's clearly an issue, and they're worried about it. So let's talk about it. Right. And then that's how you provide your commentary. And you can go really deep into the weeds on this. You know, for us, we have a robust content calendar, we're working 3060 days ahead of time, in terms of the content we're creating. But I do think you need to go where your comfort level is new for me, I'm a mom of, you know, forbidden podcast, or have been doing it for a long time. And we've started using the podcast as a way to create all kinds of micro content, right, so a 30 minute conversation with somebody as a guest. Well, with AI and transcription services, that's a blog, you chop up the video for Instagram, tik, Tok, LinkedIn, Twitter, a 30 minute conversation, give you 100 pieces of content, if you have somebody who knows how to edit that, right. So it can be very efficient. But it can also be a huge drag if you don't have a good system or process in place. And it can be daunting when you say, Well, I'm going to post every day on LinkedIn, well, unless you're working 30, or 60 days out, if you go away for the weekend, or you have a business trip, or you just get behind, you can very easily kind of never get back on top of it. And so I think just having a plan in place is really important. But again, going back to what your ICP is, and what your avatar is, is hugely important, and oftentimes, like fundamentally misunderstood by a lot of people.
37:20
Let's let's dive further into that. And I'm going to hand this one over to Brian first. And then Logan, we'll kick it over to you. But Brian, how did you determine who your target audience was when you were first getting started? Because I'm sure that that has evolved over time? And how did you put yourself into their shoes to start understanding better? From their perspective?
37:43
Yes, so
37:45
this is a real challenge for entrepreneurs and sponsors, because many of us want to just talk a lot, right. And when I first got into the business, that was certainly a big problem for me is I would go have these coffee meetings. And you look back on that 45 minutes, and you realize, gosh, I spoke 90% of the time. And I flipped the script, after I was having a lot of trouble raising capital and started just using my two years instead of my one mouth. And so you go to them, you go to somebody you think will be a potential investor. And you ask them, like, what's keeping you up at night? What are you worried about? What's the biggest challenge that you're facing? What's going on in your life, what's going on with your business, and you just become a really good listener, and you start picking up the same fact pattern, the same themes, the same consistencies over and over again. And you get a really good sense of kind of where these people are spending their time. And so it does take a little bit of effort on your part, right in terms of doing that charm campaign and going out there and doing the calls and doing the coffee meetings and the lunches. But anytime you feel like you're doing the majority of the talking, you need to ask more questions and be a more thoughtful listener, and actually be an active listener, as opposed just waiting for your opportunity to speak again. Because if you don't do that, you'll never have a really good sense of what your ideal customer profile is, challenges are. And then once you can do that, you can then refashion your widget to be a solution set for them. Which is the best way to build a relationship. You know, it's funny, there's no better way to become a phenomenal active listener than starting your own podcast. Because especially if it's interview, right, because you need to come up with such good questions, that it gets the other person talking for an extended extended period of time to where people don't have to listen to you the whole time. I actually I think my my question asking capabilities skyrocketed once I started doing this podcast every week because you realize you like you listen back to the audio and you're like, Yeah, I talk way too much. You know, people are tuning in to listen to this guest and they're hearing me talk
40:00
So I've completely changed that around Logan, what about you?
40:04
Okay, so you have to become really good and efficient at building trust very quickly. And the way that I've thought about this is, I think it was Victor Monash. You guys know, Victor, he wrote a book,
40:22
something around capital raising, but I remember him saying something around. The psychological contract of trust is complex and has multiple layers. But it's basically this connection equals vulnerability, plus honesty, divided by your presence. And that really stuck with me. And so when you are going out and trying to build trust, where's your phone? Are you thinking about your next meeting? Are you looking at the person in their eyes? Now, I realized that you can't do this necessarily online all the time, right? There's a whole different component of how to build trust online. But back when I was just meeting with people in my, you know, in raising private capital by MAC fair cloth, which is another really good book, I would recommend that a lot, he kind of has three different tiers, your core group, your referrals, and then taking it public. So where I started was the core group who do I know, right? And these are the people that already hopefully, like, trust and respect you. But when I started to ask for referrals, and say, hey, who else should I meet in your network that might be interested in this.
41:30
That's when we had to really start focusing on the trust. And then obviously, phone calls, trying to build trust on phone calls, and zooms, and all those different components. And so being present, I think, has been my force multiplier in building trust with people. You know, I've heard many times that because I asked for feedback a lot from my team members, from investors from people that I'm working with is like, why do you continue to show up and hang out with me when you could go wherever and it's like, Look, man, you're just, you're just really present, anytime. And maybe Brian can attest to this, whenever we meet, when he comes to Kansas City, I try to be where my feet are. And that's very, very difficult when you're thinking about the deal call that you've got later, or trying to make payroll or trying to figure out what the next, you know, deal is going to be whatever it is, it's really tough. But that presence is extremely important. And so I talked about those three different tiers, those the core group, the referrals, and then taking it public. And so in one of these books, they kind of had a list of the master core group, and that was your friends, your family, your neighbors, your co workers, college connections, previous investors, business groups, volunteer groups, religious groups, social groups, real estate organizations, you know, private equity groups, there's so many different places, you know, being on the board of nonprofit organizations, you find a lot of folks that want to and are investors. And so I started with that core group. And then I think that a component that a lot of people miss is, you know, it's when to ask for that referral, right? It's like,
43:10
I'm always going to be the guy that tries to connect to people and step away, and try to have them, you know, make some business and it'd be very beneficial. Brian's a master at this, this stuff comes back around to you, on a regular basis, it really does. And then so when you're with somebody that might be in a friend, or it's a current investor, and it's like, it's gone? Well, you you do need to make that ask because the easiest and best opportunity is somebody is getting that connection from somebody else that has already invested with you because they're doing half your job. And so when you meet with them, building that trust is extremely beneficial and much easier than if it was just a cold lead. The other thing, I'm much more of a salesperson than I am a marketing person, I've had to learn marketing a lot more than I have sales, because the emotional component of sales is a lot different than where should I be what platform should I be on? How long should this post be? How many words is it? You know, what's, what's my pitch on the podcast? What's the call to action? Those are all kind of marketing things. But on the on the sales front, I think that if you are not telling everyone what you do, in a way that allows them to become that hero and say, Oh, well, what would it take for me to, you know, invest $100,000 into a project, right, then you're not doing your job as a salesperson. And so, the only way that I know how to sell is by listening. Because if you're just talking the whole time, you're not going to have any success because while you might sound in your own head, really smart, somebody else that's on the other receiving end of that is like well, you didn't listen to anything that I was trying to accomplish, you know, by investing into real estate. So making sure that you're listening and having things to talk about based on
45:00
Not listening and asking more questions is the best way to go about that. Barry Wolf on LinkedIn posts, I think today about the three word phrase that is the easiest phrase to get people to talk more and open up. And that's Tell me more. Tell me more. People always want to talk more. And so somebody says, Hey, I've been thinking about investing in real estate, but I just don't know where to start. Instead of jumping in and giving them a solution. Tell me more. Well, you know, I've got a buddy who flips houses. And he says, I could buy a rental house. Or I've learned about some syndications by listening to some podcast, and I'm not sure what market to start on. Instead of instead of saying, Well, have you thought about the Midwest, I say, Tell me more. And each time they go into that, that deeper layer, of where they're really coming from, is opening up the door, and they're gonna leave that conversation and they're going to be like, Man, that guy just real or that gal just really gets me, you know, like, they get me really well. So I think that's really important. And you, you somewhat have to just be willing to get beat down a lot and hear a lot of nose before you get to those yeses. Because even a no now doesn't mean a no forever. You know, I mean, I think that's really important. I have heard one time and somebody said, you know, God's delays are not God's denials. And so just keep showing up and keep working on it. And the more nose you get the closer to a yes, you're gonna get in, if you're smart enough and humble enough, you can hone in your pitch and get better at when you're communicating these things to investors. Yeah, I wrote that down. Tell me more. Because that is that is such a great, easy three word phrase for everyone to remember. And think about it.
46:44
I mean, the most intelligent, most impressive people you know, or they're the ones that sit there and talk the whole time, are they the ones that sit there and listen, and then come in with something, you know, incredibly introspective. Anytime you're having a conversation with them? I mean, for me, it's certainly the latter. We're going to come back to building trust as well, because you're not the first person to mention that today that I definitely want to make sure that we dive into that. Dave, what are your thoughts on the topic?
47:14
I think it aligns to how you present yourself. So in the building trust or credibility position, a lot of the times my default is that as is, let me show you some of the stuff we've done. Come see one of the properties come look at what we're, we're doing in I personally, I have a better connection with that type of person who also wants to be hands on and see their investment. I got into real estate because I wanted to be hands on. I wanted to have control of what I was doing. So for me that trust and credibility comes from saying like, hey, come, come look at this deal. Come walk around it with me, take the time to be there with them and explain what your vision is with the property and, and that's a good connection. So I, for me, a lot of that kind of how do you build trust? How do you build credibility comes from showing what's actually happening in your business and being transparent? Hey, this, look at this over here, this worked well, or this didn't work? Well, what did we learn here?
48:11
Sometimes that can be hard to convey just either on a phone call, or especially through an email, it's it's really hard to showcase what you've done or how it aligns with your vision of what you're trying to do. And build trust and credibility through an email people are getting, they get 1000 emails a day. So I don't know if the necessary one another one, we still send out email announcements for all of our deals and everything but but I've had a lot of success when we just aren't able to get people to come and see something in go to data that has really helped from a trust credibility, you know, presence standpoint. Yeah, my phone calls or phone calls or fun zoom calls or okay, that in person face to face is unparalleled. Logan, let's let's dive into building trust and credibility. You know,
48:59
oftentimes, as a deal sponsor, the easiest way for you to build trust and credibility is to have a track record of success, a whole bunch of deals you've already completed, you know, a bunch of very happy investors. But when you're first getting started, you're not going to have that, right. So how do you go down that pathway of building that trust and credibility with potential investors? So trust is a function of two main components and that's character and competence. And Stephen Covey describes the four core elements of trusts, which is integrity, intent, capability and results. And so if you do not have the results now, yet, right, you're just getting started. You don't have the results then you better have great integrity, intent and capability. And high trust relationships are characterized by uplifting and positive communication. You know, mistakes are treated as learning experiences. These are high collaboration opportunities. effortless and transparent communication these
50:00
are all things that can help you bring trust into the forefront. If you do not have that track record, I relied on my, you know, upbringing and what I had accomplished up to a certain extent, up until, you know, 2018, before we had done really, any real estate deals. And so I had leveraged a lot of these different components, outside of just the results, based on taking my athletic performance. You know, just the people that knew me and my core group, that performance of relationships, and was able to transition that into, okay, I trust you enough to be willing to invest in a real estate deal, even though you haven't taken, you know, 1000 units full cycle, or you haven't done these things. The other part of the trust component that I've relied heavily on early on, is the structure, the organizational structure, and saying, look, it's not just me, you know, you might think that I'm the one out there posting all this content and doing all these things, but it's me as a leader. And so if you can showcase your leadership abilities, through communication with other people, based on their, you know, your employee retention, your, the way that people talk about you, you're, you know, you're just your, your aura, whenever you're around, and or what people are saying when you're not around, I think that's really important. Because early on, I would get a lot of folks that would check me out. And I don't mean that in like, oh, man, that's a good look. And dude, I mean, like, Hey, have you talked to? Or do you know anything about, you know, FTW investments, and you're always not going to get a clean bill of health back, right? I mean, somebody might have had a communication with you that they felt didn't go well. And so they might bring that up to the up to to the forefront. And what I've done was just tried to say, look, and not shy away from those conversations and say, look, here's kind of what happened in that situation. And just be open and honest about that. And whether or not somebody, you know, accepts that for the reality of moving forward or not, they're still going to trust you because you didn't shy away from it. Right. So I think that taking that Jaco willing, Extreme Ownership mentality over everything, even when it doesn't go well, is an extremely important criterion for building trust. And so again, I'll just, I'll just just reiterate the four core elements of trust, because I had to really dive into this, but its integrity, intent, capability, and results. So you can show somebody that you're capable by what you're doing on a regular basis intent by having a clear vision, and your integrity by how you treat others and what you've done up to this point, that sometimes can be enough to get people to forget about results, at least take a chance on the results going forward. And then, as you continue to grow and build, hopefully, you're doing projects that do yield good results, but you will have some that don't go 100% To plan. And so you need to show the great results that you know, hey, I generated this return in three years. And the ones that you said, Hey, I had to hold on to this for seven. And, you know, we got the investors money back. And here's what happened to that. I think that's being transparent. And what Dave said, was just let you come see, the good, the bad. And the ugly is extremely important. And building that trust component with with potential investors. And you can do all of that online. Now, the mode that you do that is really difficult, because nobody wants to nobody's getting on Instagram. And then, you know, hey, Logan's busted deal. You know, I'm not plastering that everywhere, right? Like, that's not, but there's ways to say, hey, here's a deal that, you know, didn't hit projections. And here's what happened. And here's what we here's the measures that we took, and how we're going to think about this type of situation going forward. I mean, man, I would say that a lot of investors ask those questions. And if you have 100% never lost investor dollars or you know, every deal is broken the projections in a positive way. Most people are going to turn around and walk away out of that room because they've done business before and it's usually not that way.
54:13
Logan, you are a walking bibliography. I'm always impressed. It's your knowledge of books. Brian, I'm gonna kick it over to you.
54:24
Yeah, in terms of building trust early on as a sponsor trust and credibility.
54:31
Yeah, I think
54:34
you do, you do need reps, you do need at bats.
54:39
You know, early on, you know, people are gonna rely on your character if you don't have track record, or don't have a lot of collateral to back you up. And so, the way you comport yourself is going to be really important, obviously in person over the phone but then on social media.
55:00
as well. And a really powerful tool that I've used with really good results is, you know, the best time to pitch is when you're not pitching. So when you're having a conversation with somebody or a coffee meeting, or you meet somebody at a conference or a lunch,
55:20
just being able to say,
55:23
I would love to keep you updated about what we're seeing in the market. Do you mind if I put you on an email distribution list? They're probably going to say yes. And then when you continue on that conversation, you always finish with this phrase, which is, what can I do to help you?
55:44
Even if it's the Master of the Universe, people still have problems, right? They have an ask they have a need, they have something they're working on. And if you ask that question, and they say, actually, I need XYZ. And if you go out of your way to make that introduction, get them that referral run that asked to ground and be helpful to them. I think you just want to build up that karma really early on, and just be helpful to people and have them think of you in a positive light with the people that you surround yourself work with or the work that you do. It seems like a small thing. But to Logan's point, every time that I early in my career, when I had coffee with somebody,
56:30
I would try to make three introductions for that person, every single person that I met with her I had a call with. So I meet with Logan, we have lunch. What can I do to help? Logan has these challenges and like, Okay, I'm gonna make three intros for you. Boom, boom, boom, boom, boom, and you do it right away, then you make thoughtful introductions and referrals. You're not going to probably get anything from that right away. But I promise you over time, if those meetings go well, and there's synergies and good things happen from them, karma will build and good things will happen for you down the road. And so it's just really about kind of the energy you're putting out there. I think early on makes a huge difference. Yeah, I think that's a that's a brilliant way to put it out there into the universe. Right. All right, we've got a couple of minutes left. But I want to do a lightning round real quick on offering memorandums because I'm a big believer that marketing is like fishing, sales is like hunting, marketing are all those little fishing lines that you throw out there that hopefully if you don't catch anything that day, or you know, shoot anything that day, as you're hunting, you can come home to a fish on the line. And the offering memorandum is a great way to do that. Right? It is selling for you while you are not there. So what are your absolute must haves in an offering memorandum? In order to better tell your story better tell the story of the deal. Better convince investors as to why they should invest with you in this project? Logan, I'm gonna kick it over to you first, then we'll go to Dave. All right. My seven elements that I put in every hopefully successful pitch are the wider market opportunity. And then the specific short term opportunity, the core team and why it's the right team, the competitive landscape and why we will all win customer engagement. So I put proof in there. Here's a project of similar scope that we have done here is or are completing right now. Here's where it that that's extremely important. Their financial projections, sources and uses. And then one that I used to gloss over a lot until I read Howard Marks books was all about risk and risk mitigation. We spend a ton of time now on risk mitigation. So those are the seven that we have in every single offering memorandum.
58:46
Dave? Yeah, I was similar to those points. You know, we make sure we have everything in a consistent format every time but we really want to point out like what needs to go right for this deal to be successful. Like, what is it whether it's, you know, we've got to do the construction really quickly, or we need to have this type of a tenant that we find whatever that situation is, we want to be pretty clear on what's needed for this to be a win. It also directly shows like hey, what's going to cause us to face some hurdles if we're not able to get it done. So trying to be very clear and direct on on those points in the LM. Right.
59:24
Photos and videos.
59:27
People don't read anything, they don't look at attachments.
59:33
Send them if you can get drone footage, the money the money play, I think is drone footage with a pitch that is subtitled. That is like five minutes. People will click that link and they will look at the deal and they want to hear the story. And then we actually videotape me pitching the deal to a as I pretend to be the LP and then my acquisitions guy is pit
1:00:00
She gave me the opportunity we do frequently asked questions. We keep it under 10 minutes. The photos and videos always get the most click rates and anything that we put into our emails. Yeah, I think that's brilliant. I mean, tell the story through pictures and videos instead of instead of writing it down. Well, if y'all are listening and you want to learn how marketing is being done, right, go follow these guys on every platform that they're on. Their links are in the show notes highly recommend you jump in. I mean, the information that they're sharing is absolutely top notch for this industry. Appreciate you all joining us, and we'll see y'all next time. This episode of the commercial real estate investor podcast is brought to you by cre launch Pro. This online commercial real estate program is designed to take you from beginner to pro commercial real estate investor with access to all of my courses, our online community and monthly group coaching calls. Learn how to confidently buy your first commercial property today at www dot c r e launch pro.com
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