Archive for Credibility
A Quick & Easy Way to Build Credibility with Private Lenders
Posted by: | CommentsOnce you get bit by the private money ‘bug’ – there’s no turning back.
Maybe it’s the goal of bigger profits. Maybe getting more respect and having every one of your offers or LOI’s taken seriously.
Or, maybe…just maybe…you like the thought of not having to crawl on your hands and knees and hope and pray that the mortgage gods of the bailed out banking industry will arbitrarily rule in your favor.
Maybe it’s all of the above.
Whatever your prime motivation is for raising private money, there cannot be enough said about the importance of building credibility.
Credibility is what makes the potential investor listen, really listen, to your offer and give it full consideration. Building unshakable credibility is absolutely vital when it comes to differentiating what you are offering vs. what other people vying for your private investors dollars are offering.
[don't tell me you forgot that a lot of other folks are pursuing your private investors' funds, did you? No? Ok, good...]
Back it up
Businesses of all shapes and sizes also fight the same credibility battle. Any time a claim is made (from pizza delivery to stain removal) the customer automatically puts up their guard. Because of all the advertising and marketing messages out there, people are naturally skeptical of any claim.
Bottom line: You have to back up any claim you make.
For instance: if you claim you can successful place a persons funds and successfully repay them with interest, you should never take for granted that you have to back up this claim.
Just because “the deal is good” is not enough.
Showing them your business plan or offering documents is a good start, mandatory, but sometimes that won’t even be enough.
However, no matter how much you say about you, it won’t matter as much as…
What other people have to say about you.
I’m talking about the irrefutable power of the testimonial.
The Power of Other People’s Words
Ok. That’s a pretty big private money marketing secret I just let out of the bag, so let’s dig a little further in. I want to make sure you fully understand what I’m driving at…
If you tell a potential private lender that you’re a good person, that they should do business with you, it will mean something to them. They will take it under advisement. However..
if somebody else (a 3rd party) says that you’re a good person and that people should do business with you (or invest money with you) the impact on the potential private investor is immeasurable. And, your credibility will SKYROCKET.
So, if you already have had a successful relationship with a private lender, you should create a way to approach them about giving you a testimonial. Do this right now while you’re thinking about it.
“BUT ADAM, I NEVER HAD A PRIVATE LENDER! I AM TRYING TO GET MY FIRST ONE!”
Ok. Ok. I hear you.But, guess what?
You can still get very valuable testimonials!
And this can help you quickly get private money!
That’s right. You can get testimonials from anybody that you’ve done business with that will say good things about you. And, here’s the really awesome part: you can get lots of testimonials because you are also promoting the other persons business who is giving you the testimonial!
It’s a total win/win.
Imagine the look on a skeptical private lenders face when they see a couple of printed pages with glowing reviews about doing business with you? Picture the skepticism melting away when you send them a letter with a people raving about how great you are.
You don’t even have to talk yourself up any more. Let other people do the selling for you!
[here's a big $ million $ tip: you should add a page to your private money focused website that features testimonials]
Man, I’m excited just writing this!
This is something that you can put to work right away in your business to tremendous effect. In fact, if you don’t take the time to do it you are just short-changing yourself in a major way.
-Happy Investing!
Why Credibility and Integrity are Important in Raising Private Money
Posted by: | Comments- Credibility
- Integrity
- Transparency
- SEC Rules
If you are unsure in any way of why these things are critical in raising private money, I submit the enclosed article from the November 2009 Issue of Forbes. (use the + button to zoom in)Forbes Article
The guy in this article, although not specifically raising private money to buy real estate investments, represents all that is wrong with some people out there who are trying to dupe people into parting with their funds. And, it perfectly illustrates why you have to market your private placement opportunity to stand out and apart from people like this. Put miles of distance between you and them.
Because of guys like this, our job in getting money from private investors is made just a little bit tougher. Each person that reads this article that may be an investor in your company might recall it when you are talking to them. There’s no telling how much outside events effect people’s decisions.
Cover your bases from the beginning with all of your investors. Firmly establish your credibility and integrity. Answer questions and objections before they arise in the conversation – address them with your marketing and/or presentation pieces.
One important thing you should note, which I discuss often, is why the “earn guaranteed returns” pitch doesn’t work well in most circumstances. The crooked guy featured in the Forbes article was running around telling everyone how he could get them guaranteed returns. This isn’t that far off from the ’secured’ returns pitch that a lot of real estate investors try to use. I’m not saying that, if you are offering securities backed by mortgage or trust deed that you aren’t offering secured returns (technically you are), but the general perception of most of your prospective private investors will be a “too good to be true” reaction.
And, if you ever wondered why the SEC regulates securities offerings, both public and private placements, the scam artists like Mr. Abdulwahab are the reason why. Once you know some of the in’s and out’s, you can get your securities offering documents in place quickly and at very reasonable cost. Then, you can present your investors with all of the right materials and have a much better shot at closing the deal.
If you’ve heard it once, you’ve heard it a thousand times: “one bad apple spoils the bushel.” Make sure you don’t let that happen with raising private money. Take a stand by conducting yourself with integrity and transparency toward your private investors. You’ll never regret acting as if the actions you take one day could wind up on the front page of tomorrows newspaper.
Want Access to Private Money Investors? – Credibility is Key
Posted by: | CommentsYou may find out the same thing I did when you first approach private money investors: credibility is everything.
It was a few years into my investing career when I realized that I would need private money to get to the next level. A successful business man, a mentor of mine, told me that honesty and character is what most potential investors look for. At the time, I thought that just a deal and a nice rate of return were all I needed to have people throwing money at me. While these were indeed critical components, reputation and credibility were equally (if not more) important.
But, what exactly is credibility in this context? Does it mean having a lot of real estate deals under your belt? Does it mean 25 years of investing experience? What does it mean to have credibility with private investors?
It’s not as complicated as it may seem. First of all, Read More→
