Positioning for Power in Raising Private Money

Positioning is the “battle for your mind.”

And nowhere is the “battle for the mind” more important than in getting private individual investors to fund your real estate deals.

In fact, I believe it is the most important thing.

“Battle for your mind” was a term coined by marketing experts Al Ries and Jack Trout in their famous book Positioning. This book is a must read, by the way. If you don’t have it, go and get a copy as soon as you are done reading this.

What is positioning and why is it so important to raising private money?

Since I’ve covered this subject before, I won’t belabor many of the basics. My goal today is to give you some solid positioning tips you can use right away to help your case in getting funding.

Suffice to say, positioning is how your prospective investor perceives you, relative to other, often similar products/services in their mind. It is more than “who’s the #1 brand” which is the pink elephant goal of Madison Ave. marketing managers. It’s about the real estate you occupy in your prospective investors mind.

Think about it: whom do you think of when it comes to your own investments?

Do you think of a financial planner friend of yours?

Do you think of a big national company , like Fidelity or Merrill Lynch?

According to Ries and Trout – and true in my experience – there are only a few companies/people that a prospect can have on any given product category “ladder” in their mind. And usually the company or person that is on the first rung wins big.

Hint: this means you should begin seriously considering what your prospective investors want from an investment and from people they do business with.

Are there any holes in what the big firms offer?

It is vitally important that you occupy a space of importance, relevance and value to your prospective investors.

To do this you must make a regular, conscious and concerted effort to put yourself in a position of authority and influence to your prospective investors.

There are some real estate agents that successfully position themselves as either: vacation home experts, investment property experts or first time home buyer experts. They go about touting themselves as focusing on this particular niche. They provide information and resources that are relevant to their particular market. Then, when someone thinks of buying a vacation home, they think of the ‘vacation home agent’.

Pretty simple.

Very effective.

Financial planners use this as well. Some in this field wisely focused on “estate planning” or “retirement rollovers” and went about doing those activities which were congruent with being an expert in this area. This helped lower sales resistance (or eliminate it altogether) and provided a big boost to their businesses.

Your Plan of Action

It seems like the common theme from the examples above is a focus. A focus on how you want to be perceived. Another common theme I’ve touched on is expertise.

For my money, there is simply no better way to quickly raise private money than to position yourself as an expert in real estate investments.

So how can you go about doing this?

Actually, its a lot easier than you think.

First of all, experts write things. Can you think of someone you consider an expert who has never written or published anything? There are probably very few.

So….start writing something of relevance to your prospective investor market about real estate investments. Write about: taxes, the market direction, interest rates & mortgages, passive income, diversification. The list is endless.

Where do you write it? On a blog and newsletter.

Again, very simple and effective.

Secondly, you should shore up what I call “holes in congruency.” In a nutshell, this means you should make sure every business related action you take fits with your goals.  This means wearing business professional attire. Getting a business card with a different company and/or title on it that promotes & enhances your position as an expert. Stop posting random things on Facebook – post what make sense for the position you want to have. Remember, prospective investors are probably able to view what you write.

Third – send something in the mail. People love getting (non-junk) mail and they like it even more when it is something helpful to them. This has been a very effective technique for me. Copy & clip an article, send a letter of introduction, send a newsletter.

But what if I’m a Brand New Real Estate Investor?

Perfect. You aren’t jaded and you have tons of energy and a fresh look. This is perfect for raising private money. Remember, if you’ve immersed yourself in your market at all, you probably know more than 99.99% of all non-real estate investors. Work with your fellow investors and some trusted agents and get a pulse for the market. Read the paper. Get a copy of the Wall Street Journal and read it (especially Wednesdays when they publish “The Property Report”).

You will soon have all the knowledge you need to position yourself as an expert – in your niche – to prospective investors.

A Word of Caution

Should you try to occupy the top rung on the ‘investment’ ladder in your prospects mind?

No.

This probably isn’t feasible.

Why?

Because too many other companies have put money, time and effort into bombarding your investor prospects with their messages. Bright new shiny objects everywhere they turn.

Even if you do occupy it for a time (unlikely), you’ll be unseated the next time the stock market shoots up 20% in a year.

You cannot and should not compete in a direct manner with the big boys. It is a tough sell to compare your private money offering to their investments with a big national brokerage.

This is why it makes me cringe when I hear real estate investors bad-mouthing “traditional” paper asset investments. Never bad mouth any previous investment decisions your investor has made.

Position your offering as a different from stocks/bonds/mutual funds. True diversification. A transparent and tangible asset. There are so many benefits to placing funds in a private real estate placement. I’ll bet you never took the time to write them all down!

Positioning in a huge power in raising private money. Once you win that piece of real estate in your prospective investors mind, you will stand to gain a windfall of capital. Not to mention referrals for additional investors and new business. New opportunities will open up.

Stake your claim.

-Happy Investing.

Tags: position yourself for private money, Private Money Marketing