When you are marketing for private investors, either through direct or in-direct means, you better have a hook.

What is a hook and what does it have to do with getting private mortgage investors or equity investors for your business?

Let’s take it from the top

The hook: It’s a compelling reason for someone to want to learn more about investing their money with you or a a unique selling proposition that you have. You’ll have a lot more success finding private investors for your deals and bringing money in when you present yourself and your business as unique and effective.

Allow me to clear the air on something:

“10% fixed return secured by real estate” is NOT a hook. It’s tired, boring and used by many other people.

Successful marketing, whether for private money investors or widgets is based on standing out, not fitting in.

Old and Tired

I’ve tried advertising with: “get 10% secured…” routine. Yes, I did get some responses, but most of the time the message just bounced right off of people. The responses I did get weren’t very good. Lesson learned.

My position with marketing for private money is the same as any other marketing that my business is going to do: if you are going to do it (and spend money on it most likely) then it’s better to do it the right way.

I’ll say it once again here and a thousand times more if I have to: “when you market for private money, whether through you own pre-existing relationships (the best place to start) or you go the general solicitation route (better have your securities law compliance down) you must do good marketing.”

Very few real estate investors focus on marketing. They don’t spend enough time, money, energy or effort on mailings, email campaigns, website marketing and so on. If I could change this overnight, I would. I can never emphasize enough how important marketing is to your overall success. For now, we’ll focus just on the private money marketing aspect.

Hook ‘em

Whether you are looking for private mortgage loans to fund, fix and flip rehabs or you want private money investors to fund the equity component of your bigger projects, you need to hit prospective private investors with a compelling message. Pique their interest and give them a strong incentive to call you or email you or visit your website. You must be different in what you are offering (in the minds of the prospect) from what other people seeking their money are doing.

Banks, financial companies, retirement planners – they are all competing after the same investment dollars that you are. These companies, too, want to have your private investors putting their money in their coffers. Many of these companies offer what is perceived to be safe, secure and predictable investments. CDs, annuities, bond mutual funds – you name it. There are a lot existing financial products and marketing behind them that emphasizes rate of return and safety of investment. If this is the case, why would you offer what a lot of other people are offering?

Instead of doing the same thing (e.g. ‘fitting in’), you might offer someone an opportunity to participate in a the most tax advantaged investment class available (real estate). You might offer your prospective investors a way to learn how to hedge themselves against the looming inflation brought forth by the unprecedented levels of government stimulus over the past few years (real estate works for this big time). These are two hooks that have worked well for me. Whatever you present, make sure that it meets with what your target investor wants. Hit on the pain points and hit on the greed nerves.

Speaking of that, knowing what drives your private investors decision making will help you market more effectively. It will help you be where they are and deliver messages to them that work. It is often said that FEAR and GREED drive all investing decisions. You would do well to heed this axiom when marketing to private investors.

There is a lot of competition for the investment dollars that you are pursuing. Having a hook with your private money marketing will help you develop a continual stream of qualified private money investor leads. Keep building your pipeline of private money. That big seven-figure deal is just around the corner…and there are a lot of private investors hungry to invest with you. Just roust ‘em up!