But, people still read newspapers. And perhaps more importantly, those in your “target market” for private money are probably newspaper readers (at least the Sunday paper).

So…

Should you ever advertise for private money using the newspaper?

I think there are a few determining factors that you must consider before pulling the trigger on something like this.

1. Your market
2. Your marketing
3. Securities laws

First let’s talk about your market.

If you don’t have a clearly defined target market for your investment opportunity, you’ll be wasting a great deal of time and money on advertising in the newspaper. A big part of this waste will come from: wrong ad copy, wrong ad positioning, wrong paper selection.

How you write your ad is critically important. If you cannot catch the readers attention and compel them to the action you want (lead generation in this case) then you are wasting your money. But you don’t just want any old reader…no…you want to signal out to your target market (those that have investable assets) that your message is for them.

Even if you get your ad copy somewhat decent,  if you don’t place your ad in the right part of the paper (it’s very easy to mess this up) then your response is going to be depressed. In addition, you may not even be selecting the right newspaper to place the ad in.

But let’s say you get this down: you have the right paper selection, good ad copy and the proper position in the paper.

Now it comes down to what exactly you are offering to anybody that calls. Are they calling you directly? Visiting a website? Calling a voice-mail box? What happens after they call? What kind of follow up marketing sequences do you have in place that will ensure a return on advertising investment?

Ok, let’s say that you have a fantastic marketing sequence in place and you also have a great ad, good paper and good placement.

Now, let’s talk about securities laws for private money for a minute. Of course, I’m not an attorney and what I’m saying here should never be construed as legal advise. You should retain a good securities attorney when you get super-serious about raising private money.

When you run an ad in a newspaper for private money, depending upon what you are offering in terms of investment, you may be making what’s called a “general solicitation.” This means, in the eyes of regulators, that you are trying to sell a security to the broad investing public.

And there are lots of laws in place that try to protect the investing public from securities solicitations that haven’t been at least reviewed by the SEC.

Is this a complete bummer?

I don’t think so. If you have a good opportunity and you know that you can deliver, then it may be worth pursuing. There’s nothing better then having your phone explode with leads from people who are ready, willing and able to place funds with you.

An important note: you have to be ready to do proper follow up marketing and securities laws compliance when you use bigger advertising. The worst thing you can do is let a bunch of hot leads sit for days and days. People want instant information. Give it to them.

Advertising for private money could be very profitable for you, even in spite of the small obstacles. Consider everything I’ve said here in addition to your own business goals and objective.

-Happy Investing!

You know what I mean?

As long as the technology conveyor belt keeps speeding up, accelerating us to the space age of George Jetson, they might as well get a move on this robot-worker thing. I’m waiting for my bebop assistant to handle all the little things that creep up and consume time in my day.

You probably feel the same way. Never enough time to get things done.

Especially your private money marketing.

After all, you’re looking at deals, talking to contractors, brokers, etc. Doing the email and phone call thing.

Where does it all go?

Since you’re an entrepreneur you’re naturally a problem solver. And, with there being no time to get your private money marketing done, why not just be more efficient and…

Run and Ad in the newspaper!

Wow! This is great. You can pay a few hundred (or thousand) bucks and get your ad in front of a lots of people, some of which are sure to have lots of idle cash sitting around and will jump at your opportunity to place their funds.

Oh, the genius!

So, you draw up a basic advertisement. Quarter page. “Earn 10% secured on your money.” You’re pretty sure your phone is going to blow up, so you set up a voice mail box to take the calls. You send in your check to the newspaper and sit back and wait for the cash to come rolling in.

You pick up the paper on the day your ad runs. Now, it’s time for action. And then…

Silence.

Crickets chirping.

Then, a phone call. Your voice message lights up. Suddenly more calls come in.

Dang it- YOU WERE RIGHT…THIS IS GENIUS.

Throughout that day and the next, you get quite a few calls from your ad. You can’t wait to rake in all of that private investor cash. You’re going to be rich in no time flat. Fiji, here you come. Move over Tony Robbins.

So you start going through the voicemails. And, you start to get a little agitated. Seems like a lot of the people that called didn’t really know what they were calling about. They thought you were a bank or that they owed you money or something. Oh well, I guess that happens when you’re dealing with the general public. There’s still quite a few more calls to go through. You continue.

The next few messages you get don’t make you very happy, either. You call some of those people back and they want to invest $500 or $1,000. That sure won’t work for a $250,000 investment property. You would need 250 of those people! Ok, so you press on.

The remaining messages you get are from people who want to know more information about your program – and then they find out that it’s about investing in real estate, and they lose interest. They don’t like the thought of real estate, since their stockbroker told them the market was up 60% last year. They also felt misled because you advertised the returns as ’secured.’ They’re not really sure what that means, so they tell you to just send them some information to evaluate.

“That can’t be right,” you think to yourself. “My phone rang a lot, I should have at least $100k lined up by now.” Sure, in a perfect world that’s what would happen. But what you’ve just experienced is an example of ‘non-targeted’ marketing.

But All the Other Kids are Doing it!

Just because the financial planners and insurance companies advertise their products/services in the daily newspapers doesn’t mean you should as well. After all, they’re going to make money on that mere $1,000 investment, and you are not.

Maybe you heard about other real estate investors doing this in different parts of the country. They thought it was a good idea too. But, you never saw their results or new how much private money they got from running the ads.

It’s usually a bad idea to make business decisions which aren’t based on results.

Ok, live and learn. Maybe re-tool the advertisement and put a better response sequence in. But then you get…

The Strangest Call of All

A voicemail is left by somebody from your state securities regulator. Seems they want to know more information about your securities offering, your entire operation. They are polite but stern.

Now, you’re concerned.

Seems that you may be in violation of some securities laws. You see, typically, you aren’t allowed to advertise your securities offering to the general public unless it’s a “public offering.”

Oops.

Pressing Onward

Now, we can see that non-targeted marketing isn’t the best and newspaper advertising is usually not worth the paper and ink it appears on.

We’re going to cover this more in depth coming up. In the meanwhile…

Happy Investing.

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!