I have a very special guest today. You know, the question often comes up where I get asked, Hey, you know, I’m running out of cash. I can’t buy any more property and I’ve got great credit, but I’ve spent all my investible cash and now I can’t buy any more properties. I have to keep working and earning and saving. And that’s a normal problem because I generally break it out into two things. The two C’s that people need when they invest in real estate, cash, and credit. And most of the time, the people we talk to already have the credit, but they just run out of cash. So what I want you to do today is listen carefully to this episode, because I think this episode is going to be very helpful to you to help you continue to grow and build your real estate portfolio.
So my guest today’s name is Dave Dubeau, and I hope I’m pronouncing that correctly. Dave is a real estate entrepreneur. He’s a best-selling author. He’s a speaker and an investor attraction expert. I love that title for the last several years. Dave has been the leading authority on helping mom and pop real estate investors find additional capital and money partners to do more deals. And he uses his proprietary five-step money partner formula. Dave helps his real estate entrepreneur clients grow their portfolios significantly and in record time by attracting investors instead of chasing after them.
Dave, welcome to the show.
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Marco, thanks for having me. It’s a pleasure to be here.
Well, I’m glad to have you on, I’ve had some great conversations with you. In fact, I was a guest on your show and I appreciate that. So we got into a conversation talking about, well, Hey, what do you really do? And tell me more about what you do because I thought, Oh, this is pretty interesting because I know that a lot of investors and clients that we work with ultimately run out of cash, right? They buy their 1, 2, 3, 5, 10 properties as fast as they can, you know, they’re off to a good start, but then they run out of cash. And so I thought, well, Hey, you know what? I need to pick your brain and find out what you recommend in terms of helping people to grow and grow their portfolio. Why don’t we start off by me asking you, how did you actually get into this? What I call a money niche.
Yeah. Interesting story Marco. So like most folks, most real estate mom and pop real estate entrepreneurs. I sell to finance my first few deals when I was focusing on client-first rent own deals. So in that case, we’re finding a tenant-buyer, then go buy them a house and rent on it to the motor of the next two to three years. So I did the first couple of my own under my own financial steam. Then like most folks, I ran out of cash and I remember this vividly because of a terrible experience. I had the perfect tenant-buyers come into my life, went out, found a really nice house. Got it under contract. And the only thing I was missing was the down payment. All right. So I need about $85,000 to close on that property. And I don’t know about you, but I always heard this expression just find a good deal and the money will find you. Have you ever heard that one?
Yeah, very often. And I was gonna actually ask you to elaborate on that. So you might as well talk about it.
Yeah, exactly. So we hear those all the time. So I had heard that, but I knew I was going to have to do something. So I was also aware of, you know, people saying if you need to raise capital for a deal, pick up the phone and start dialing for dollars. So start cold calling people that, you know, and see if they’re interested in investing with you. So I tried that I was very nervous about it. I really didn’t like the idea of doing that, but I forced myself to do it. So I made calls and calls and calls and calls and calls. And bottom line Marco got rejected, rejected, rejected, rejected, and my fragile little ego couldn’t handle it. So I quit doing that. So the next thing I remembered it, you’re supposed to be doing. If you want to raise capital, is the expression, turn every conversation into a real estate conversation, get out there and network moves, you know, get the word out, practice your 30-second elevator pitch, your 30-second commercial, all that gotta stop.
So I ran out to the local chamber of commerce, ran out to the local BNI groups, the Toastmaster group in town. And I talked up a storm about my deals and raised exactly zero capital. So by that time I was running, running out of time. I had to get a little bit of an extension and I thought I came up with a brilliant idea. And that was why don’t, I mean, this is such a good deal. It’s going to sell itself. Why don’t I put together a little one page PDF and email that to everybody. I know. So I did and I was kind of excited cause I started getting some replies back to this email. It was the first sign of life I’d add yet. I was excited until I started reading the replies, Marco. And this is kind of the gist of how they went.
It was, it was basically like, Hey Dave, haven’t heard from you in five years or 10 years or 17 years or whatever it was. Right. And here you already hit me up for cash for a deal bugger off or some version there. I’m usually not that polite. Right? So bottom line Marco, I wasn’t able to close on that deal. Had to return my tenant buyers, all of their cash. They put in ticked off the seller. Big time ticked off the realtor, ticked off my tenant-buyer. I was in a smaller kind of a small city. So we’ve got some serious egg on my face. And that’s when I decided, you know what? I don’t want to be in this position because you know when you’re in that position where you really need the money, it smacks of desperation. Well, I actually was desperate. So it just kind of oozes you, you need the cash desperately and desperation is kind of needy and needy is creepy.
So that’s basically how I hit the bottom when it came to needing capital and not being able to raise it off the cuff like that. And that’s when I decided to start learning and studying about this. And a lot of what I learned and studied was the same old, same old was all about getting better at dialing for dollars. I didn’t want to get better at dialing for dollars. It was all about getting better at closing people in sales techniques and manipulating people in NLP and people and all this kind of stuff. And I didn’t really want to do that. It was also about getting better at networking was getting better at schmoozing. Then I stood back and I said, Dave if there’s one thing you’re pretty good at its marketing. I mean, marketing has got to my forte, my background. And I thought, why don’t I try applying marketing to attracting investors, raising capital instead of chasing after people. What if we applied marketing to the whole process and get people reaching out to you already, pre-educated pre-motivated predisposed and prequalified to invest with you. So that’s what I really started working on and through some trial and error and trials and tribulations came up with what I call my five-step money partner formula.
So you brought up the question before what comes first, the money or the deal? Which one is it?
Well then my not so humble opinion. The money should come first. Now when I say the money should come first, what? I don’t mean that you should have people signing your checks for a hundred grand or 200 grand or whatever. And having it sit in your bank account, that’s not what I’m talking about. I’m talking about having your investors lined up in the wings, ready to go. So it’s kind of like, you know, a theater, you’ve got actors waiting in the wings to get on stage, to do their performance, the same idea. Let’s get our investors lined up first. Let’s get the capital spoken for not necessarily in the bank yet, but at least we’ve got a bunch of people who’ve already put up their hand said, you know what? When you’ve got a good deal, I want first dibs on it. So then once we’ve got those investors lined up in the wings, now we can go forward. We can start looking at properties, making offers and we can do so with confidence because we know we have the capital to back us up.
Yeah. So it sounds like a human version of a line of credit. That’s basically someone who’s committed the credit to you, the money to you, but you don’t have it in hand and they won’t give it to you until you actually have a deal that they’re okay with.
Exactly. And then here’s the real trick to it. The real trick too is that you want to have more investors lined up than you actually need so that you’ve got some extra capital. So because you know, there can be a lot of things that could happen between when somebody says, yeah, I’m interested and an actual deal comes out. So you want to make sure that you always raise more than you actually need.
So who do you focus on and turn to? You know, obviously friends and family are probably what everybody thinks about. That’s the low hanging fruit, but beyond your friends and family, who do you target or who do you market to?
All right. So quick caveat here in the article. Cause I know you’ve got a lot of listeners who are international. A lot of folks that are in the States, a lot of people that are in Canada as well. So first caveat is cover my butt. I’m not a lawyer. I’m not, an accountant. I’m not a security specialist. What I am is I’m a marketer and I am a real estate entrepreneur. So what I’m sharing is my understanding of how, of what the best practices are. Okay. So before you rush out and do anything, make sure that you get the appropriate legal counsel, especially for your area. Each state is different. Each jurisdiction is slightly different. So make sure that you’re doing things right. That covered my butt. Good enough there, Marco.
You covered it very well. That’s good.
Alright. So here’s, here’s my philosophy. My philosophy is most people don’t tap into their friends and family anywhere near as well as they should. So when I’m working with clients and when I’m teaching people about this, what I always suggest is let’s start with a target group of prospective investors and let’s try and have about 200 people in that target group. Now, who are those folks? These are people that are in what I call your sphere of influence people that you have a preexisting relationship with. So obviously friends and family members also extended family members. It could be coworkers could be, if you’re self-employed could be current and past clients and customers to be people that are part of your associations, your church groups, what have you, you know, these people and they know you now, the reason I always suggest this, it is the low hanging fruit. It’s just, it’s just kind of logical, typically marble for somebody to invest with you. They need to know you. They need to like you and they need to trust you with their money. Right? Right. So if we’re trying to raise capital from the general public, we’re starting from scratch, they don’t know you. They don’t like you. And they sure as heck don’t trust you with their money. So you have to create that relationship for nothing. So why not start with the people that we already have a relationship with? They already know us. They already like us. So then all we have to work on is the trust factor and that they get them to trust us with their capital. Does that make sense?
It makes total sense.
I’ve kind of expanded on the answer to the question in my mind thinking that, okay, friends and family are typically the first people you go to because they know you, you know them, there’s already that element of trust. And then you go out to the next circle of that. Bulls-Eye if you will, and it’s your network, the people that are not necessarily related to, but they know you, you know, them maybe to a deep degree or maybe just kind of high level superficial, but it’s your network. And then what I think of is going to other likeminded people that are not necessarily in your network, but I refer to them as other real estate investors, people who get what you do and they want to do deals as well. And so they may be wanting to invest in real estate or they may just be wanting to lend cash. And they’re a note, a promissory note investor. And then beyond that, beyond what I call the, you know, the human or the people element, it’s now looking at institutions where you go to get a line of credit or a home equity line of credit, what we call a HELOC and then kind of the most outer layer of that onion, if you will, is I refer to as idle equity and that’s monies that are trapped in property that you can pull out through either a refinance or putting a line of credit or even selling the property and, you know, moving that equity elsewhere. So those are how I kind of layer it in my mind. Your focus is really on people’s side of it, the friends, family, the network, and other real estate investors.Is that right?
That’s, that’s exactly right, Marco, because we always have to remember. So for example, yourself, as a perfect example, your probably several rungs up on the ladder compared to a lot of folks that are listening to your podcast, right? You’ve been around the block a few times. You’ve got a lot of experience. So who I really help is I help the folks that are just getting started working with investors and raising capital and working with other people’s money. So what we do is we help them get the ball rolling, and then once they get things rolling, then yeah, they’re going to have to start looking and expanding that level. But I firmly believe that most people have at least a million dollars in capital that they have access to within their sphere of influence. They just have to figure out how to crack that code. Does that make sense?
So let’s turn that into a question. If we all have access to a million dollars or more through our sphere of influence, how do we start to tap into that without sounding like you’re coming across as a, I hate to say a network marketer, but a network marketer and you know, cheesing people off and then telling you to go pound sand.
Yeah. Yeah. It sounds like you you’ve heard a story like that recently, like five minutes ago. Right? So how do you, [inaudible] tail do not do what I did cause I was dumped. All right. So 2020 hindsight seems smart at the time, but it’s very, very stupid. So here’s what you want to do instead. Here’s exactly what you want to do. You want to create that list of prospective investors? Let’s just say, let’s say we’ve got 200 people on that list by the time the smoke clears, right? So 200 people. And instead of rushing out like a twit, like I was being a bull in a China shop and just say, Hey, I got great deals. If you got any cash. No, that doesn’t work very well. So what you want to do instead is you want to reconnect with these folks on a personal level first, before you start talking business. That’s my suggestion. So what did we call this with? Our clients is a warmup campaign, a warmup campaign, and we’re going to do this via email. So this is a very simple three-step email campaign. The first email that goes out is just a regular email and where you catch people up on what you and the family been up to for the last, let’s say five years. So I always just pretend that whoever, whoever it is that I’m sending these emails to, hasn’t heard from me for at least five years now, a lot of them have a lot of them haven’t but I just send the same message out to everybody. So I call this the Christmas letter from aunt Nadine, because way back in the day, my aunt Nadine, before there was cheap, long-distance and interwebs and all this kind of stuff, he used to write letters and every Christmas she would write us a letter. She would photocopy that letter, stick it in the, in the Christmas card and send 50 of these out to our different sundry, friends and family. So same idea. Now we’re just going to do a modern electronic version of this. Tell people what you’ve been up to with, with work, what your, you know, if you’re working at a job what your living arrangement is, family situation, spouse, kids, ages, interests, basic high level stuff. Don’t go too, too in depth. And at the end of it say, well, that’s what I’ve been up to now. How about you? What are you doing? Please hit reply to this email. Let’s reconnect. And you send that out through an email autoresponder, you know, all about this Marco. So basically you create one email. It goes out to all 200 people, but it’s personalized for each person. Does that make sense? So that’s, that’s the first kick of the cap. Any questions about that?
Yeah, a quick one. And hopefully, this is not too tactical, but I’m just curious. Email is it seems like everybody has email. Email’s an easy tool and probably makes the most sense. But with social media being as big as it is, especially with LinkedIn and you know, being able to find your friends on Facebook, friends, and air quotes, is that a viable tool or is that just too superficial and emails? Really the better way to go.
I just find at this particular junction email is more efficient. Okay. I’m not aware of here’s the challenge, right? You’re going to have some of your friends on LinkedIn, some of your friends on Facebook, some of your friends could care less about social media. Some are just on your phone, they’re all over the place, right? So when we’re working with clients where we’re gathering all of their contacts from everywhere, so what I found is the most efficient thing to do and therefore it’s the most likely thing that’s actually going to get done is email.
Okay. Okay. So I don’t want to break your train of thought. It sounded like you were kind of going through a process. You start with email, reach out, reconnect.
Yeah. And then here’s me. Here’s, what’s really important when somebody replies back to you go back and forth with them, have a genuine conversation via email. All right. So that goes out first three or four days later, we sent out a second message. Same just so it’s basically a ketchup message, but we send it out via video instead of just a plain text email. Does that make sense? So centered on an email, it’s going to have a link to a video that can be on YouTube. That’s fine. And the person clicks on the link goes and they get to see you talking and catching them up on what you’ve been up to. And what we found is that this really kicks things up to the next level because video is the next best thing to being there with the person. And again, at the end of it, you say, Hey, well, that’s what I’ve been up to for the last while you don’t have to do a video, but hit reply to the email or this came out on and let’s catch up, let’s see what you’re up to as well, send that one out.
And then again, go back and forth with the people that they get back to you. All right? And then here’s where the magic comes in. Marco. The third and final part of this three-part sequence is called the transition message. And this is where we kind of give people fair warning. We give them the heads up that we’re going to switch gears and start talking about real estate and that we’re going to be encouraging them to reach out to us if they’d like more information. Does that make sense? So it’s kinda something like, Hey, it’s Dave, it’s been really good reconnecting with you for the last little while. I want to let you know, I plan on doing a better job of staying in touch, letting you know what I’m up to with real estate investing. I’m really excited about it. I’m doing really well with it. I think it’s the best way for everyday folks like you and I to get a really good, solid return on your money backed by tangible asset real property. And who knows maybe sometime in the future, you might even want to partner with me and share in the profits on a deal, blah, blah, blah, blah, blah. That makes sense. Yeah.
So the way you’re delivering this, doesn’t come across as a pitch or a setup. You’re essentially opening the door because you’re telling people or sharing with people what you’ve been up to and what you’re doing. So they’re basically asking you in return, you know, Hey, how are things with you? What have you been up to? And your aunt’s simply answering the question I’ve been investing in real estate. So it’s kind of like teeing it up, but you’re not really setting them up. I mean, you are setting them up in a way, but you’re doing it in a very conversational, low, key, conversational, friendly way. And so that just opens the door and it doesn’t smell like they’re getting pitched.
Right? Exactly. And we’re giving it. And plus the nice thing is when you got the email autoresponder, you can say, you know what, if you’d rather not hear about this stuff, just click on the link at the bottom of any of my emails, you’ll be taken off the list.
Okay. Here’s what I’m wondering. Obviously, if it’s friends and family, someone that you talk to on a regular basis, you know, someone you see maybe every weekend, that conversation I think is going to be different. I would assume then someone that you see maybe once every one or two months versus someone that you probably haven’t talked to in like two or three years. Right. So there’s a different way.
Yeah. But here’s what I always recommend, Marco. No, I don’t. I recommend that you do a one size fits all and you send the same message out to everybody because here’s the challenge. If we get too into the weeds on this, then the likelihood of anything happening, diminishes great with people doing it, right. The more complicated, the more complex we make it, the less likely it is to actually happen. So the second point of view on this is even if you’re sending this to your mother who knows you better than anybody, probably it’s not going to hurt. Right. And the other thing is the folks that you see on a fairly regular basis, we always overestimate how much other people are really thinking about us. And here’s the reality of Marco everybody’s thinking about themselves. So there’s probably some stuff in that message that you’re going to be sending them that they forgot about or they aware of. So it doesn’t hurt to send it out to everybody.
So can you maybe share a couple of tips on, on the best way or best practice of getting the word out about your real estate investing? You probably not just getting started. So you have something to say about it, but do you have any suggestions or tips about it.
About the actual marketing side of things?
Getting the word out that you’re investing in real estate. So that way you can open up that conversation.
Yeah, definitely. So out of this whole, my process, the five-step process, what we just covered is the first steps are creating that contact list of prospective investors. Hopefully a couple of hundred of them and breaking the ice with them. The next step, before we actually get into heavy-duty marketing, the next steps is really important. And that is making sure that you’re set up with what I call your million dollar investor presentation, right? Because here’s what happens, Marco, that warmup campaign is not designed to start creating interest in and start creating appointments. However, quite often that’s exactly what happens. So when we’re working with private clients on this about half the time, in other words with about half of our clients will actually get people reaching out just from that warm-up campaign and saying, Hey Marco, I’m interested. I’m curious, what are you up to with real estate? Tell me more. Right? So now you got to be prepared in case that happens to show them what you’ve got to show them about your deal, because you can do everything else. Right. But when the rubber hits the road, it’s all about how do you present your opportunity during that meeting? So the next step really is before we start doing marketing is to make sure that you’ve got your presentation dialed in. Does that make sense? Yeah. So it’s all about my personal opinion is a well thought out well-designed well-organized slide, deck slideshow presentation is probably the best thing most of us can do because it creates a little bit of a system. A bit of a process it’s helps keep us on track. It helps make sure that we don’t forget any of the important questions. It’s much more visually interesting for the other person as well. And it’s just a more effective way to present our deals in person or online. Like most people are going to be doing these days. So it’s all about creating that presentation.
So you’re a marketing guy and you’re using, you know, terminology like a campaign, which is, you know, what marketers use in terms of defining sequences of marketing messages, is this campaign an ongoing campaign that never ends because you’re always communicating and you’re sending out a message or is there a finite period of time when you run this campaign to reach out to the people, to find out who actually really wants to communicate with you and catch up?
No. The first thing that we just talked about, that old warmup campaign, that’s a, that’s kind of a one and done thing. That’s how we get the ball rolling. So you create your list. Yeah. That’s, that’s tour of this right now, as, as you’re going out and about, and you’re meeting people and whatnot, you’re going to be perhaps growing your list, bringing people onto your list. But in cases, what I would suggest is just ask them if they’d like to be added to your list and they say, yes, great. Just plunk them in wherever you happen to be at. So then that gets to your next question, which is what are some of the other ways to get the word out? There’s lots of different things that you can do. I think the best thing to start with Marco is to have a really good website that is really focused on communicating with your prospective investors.
So an investor-focused website, and that could be your online marketing hub, everything, that’s your very own little piece of online real estate, if you would. So everything comes from your website, ideally everything brings your people back to your website so they can find out more and they can click on that big contact me button to set up an appointment. So the website’s kind of the cornerstone. And then the other things that you can do, lots of stuff. It really depends on your personal preference. So being a marketing weirdo erroneously, I thought back in the day that everybody loved marketing, like I do, and nothing could be further from the truth, actually market. Most people hate marketing. They disliked the idea of marketing and doing this kind of stuff. So I’ve changed my tune. So now what I suggest to people is pick one thing that you would at least not mind doing and get rolling with that and do at least one communication a month to get started with that’s the rock bottom minimum.
So for example, if you are more comfortable with writing, if you’re into writing, then you could consider doing email campaigns, you could consider doing blog posts, you could do it, consider doing electronic newsletters, hard copy newsletters, these kinds of things that are more written. So pick one of those things that you kind of enjoy doing, or at least don’t mind doing and do that on a consistent basis. If you’re like me and you’d rather, you’re not really big into writing, you’d rather do audio or video type stuff and do that. So that’s perfect as well. So video, I think is the absolute best way to do things these days. It’s just a, it’s kind of a multimedia type thing, multisensory type experience for people. I just find it works really, really well. So pick one thing and do it consistently.
Okay. Let’s switch the conversation to the money side of the equation here. We’ve been talking about the marketing side. So people are interested in what you’re doing. They want to learn more and they’re coming forward and saying, Hey, I’ve got investible cash. You know, I’m not dialed in.
I wish they came forward just like that and told me that right off the get-go. Yeah, yeah,
Yeah. I mean, at some point they’re going to let you know, they’re not going to come right out and say, Hey, you know, I’ve got 50, 50K a 100K of investible cash upfront, like right away. Eventually, you’re going to find out if they have expressed an interest. But my question is, at some point, someone’s going to say, Hey, I’m too busy to be investing on my own. I do want to work with you. And so let’s join forces, I’ve got cash, you’ve got the sweat equity as they call it, the credit, whatever else it may be. What are you maybe telling or teaching people to do with that money? Is it coming in as down payment money or are you teach or recommending people to partner? So they’re basically joint owners, joint investors, or is it a combination of two or are there other ways to structure all of this?
Oh, there’s a ton of different ways to structure it. I don’t tell people what to do with how they’re going to structure their deals. I can give people pointers. I can point them in the right direction, but here’s the thing, Margo, I hate hearing this answer, but it’s the truth. Everybody’s different. So it’s really going to depend on how much experience you have the real estate investing strategy you’re focusing on. So for example, if you’re doing single family homes versus multifamily properties, if you’re doing short term deals versus longterm deals, these kinds of things, whether you’ve got enough credit that you don’t need help to qualify for financing, or if you need capital and credit for getting into the property. If you’re looking to get some financing to buy the property and then different financing to renovate the property, there are so many different variations that is way beyond my scope to be able to go into all of those details. But what I do, what I specialize in is helping people to get to the point where they’re having that conversation. And now what we do with our clients is we kind of look at, okay, what are you doing? What do you want to accomplish? Here are some suggestions on what you might consider for structuring your deals. Does that make sense? So everybody’s situation is very different.
Okay. So, so you’re not driving that part of it, basically finding money partners. And I say more partners loosely here because they may not actually be an equity partner in a deal, but finding money partners is really just your access to more capital. So you have the money’s ready and able to be deployed into future deals that you’re doing. So you can do more deals after you’ve run out of capital. So it really doesn’t matter what your investment strategy is, whether it’s buy, fix and flip property or buy and hold and build a portfolio, you’re just getting access to more capital to do more sooner. That’s where you’re helping people.
That’s our entire focus. What we have is really, it’s like a, it’s like a marketing agency more than anything. It’s, it’s not just coaching and training. It’s actually helping people to implement this stuff.
Okay. So now you’re, now you’ve got me thinking a little bit about the security side of the equation. And I know, you know, you’re not an attorney, I’m not an attorney. And so, you know, we’re not talking about securities regulations here, but it does beg the question of when that comes into play. So if someone’s listening to this and they’re thinking, well, I’m going to do syndication a group investment and find myself, you know, a fourplex or a, you know, a, some small multifamily property or whatever it may be. And I’m going to raise capital from other people, depending on how you actually raise that capital will bring into the equation, the securities laws and regulations. So do you get, do you go into that at all? Or what do you recommend people do?
Yeah, well, not, not really. So again, that’s why I did the cover, my butt thing at the beginning here where it’s, it’s like, if you’re going to be doing something like that, make sure that you talk to a local lawyer, who’s familiar with how securities are regulated in your particular area. Right. So, you know, and I’m not an expert on this, but there’s like four different criteria for how the sec decides if something’s a security or not. So if you’re in that realm, there probably are exemptions that you might qualify for, especially for a small little deal like that. But you have to get things set up properly in that respect. If you need to go through a lawyer for that, are you going to be doing that through an LLC or corporation? What are you going to be doing for all of that kind of stuff that is beyond the scope of what I can help people with?
What I can help people with is how to get access to the easiest, fastest capital first. That’s what it’s all about. How are you going to structure your deal? How are you going to be compliant legally with all of that? Are you bringing that person on board as a joint venture partner? They’re going to have some sort of a little bit more active role in the property that could in that scenario, exclude this from being a security. Are you going to bring them on board as a private lender? So they’re basically loaning you money and the properties, the they’re kind of like the bank and the property is the collateral in that case, that could be exempt from being a securities. But again, that’s why it’s so important that you’ve got good legal counsel to make sure that you’re coloring within the lines,
Right. So that just falls under the legal umbrella, because at the end of the day, when you’re raising capital, you need to make sure that you’re compliant. You need to find out if you’re, you know, crossing that line where it’s now securities related, as opposed to just a loans or investment capital or partnerships. So your focus is really marketing to find these people, building your list and nurturing these people to essentially find more money partners. Again, I use that term loosely, but essentially find the people who want to work with you and vice versa to get that investment capital. So you can invest in more property and do it sooner than later, instead of waiting to accumulate that through savings and whatnot. Is that a pretty good summary? Yeah, exactly. Why are more, why are more people doing this? Like what’s holding people back from, you know, tapping into, well, even their friends and family, but beyond their friends and family, you know, most people will know one or 200, if not 500 or more people. Why aren’t people doing this on their own?
You know what? I think it really boils down Marco to the fact that most of us are very afraid of rejection, right? We’ve got this deep-seated fear of hearing. No, we’ve got this deep-seated fear of mixing business family. We’ve grown up hearing neither a lender nor a borrower be, you know, don’t mix friendship and business. It’s the shirt. Don’t definitely don’t mix family and investing is a recipe for disaster. All these kinds of things. Or another big thing is, you know, you talked about network marketing. So, I mean, I can’t even remember what the numbers are. It’s like something like 38 or 40 million people have taken a crack at some sort of MLM network marketing type thing. And I think out of those 38 or 40 million, I think 12 have made some money, not 12 million, 12 people, right? So there’s a very, very, I’m being facetious, but there’s a very, very low success rate in that.
But a lot of people have taken a crack at it, made a splash, haven’t made any money and they feel like they’ve shot themselves in the foot. Right. So you’ve got all these hangups about approaching our friends and our family about our real estate investing because we’ve got all this mental garbage going on, right. So I think if I could help your listeners in any way, it would be about shifting their mentality about this. And here’s my take on it. And let me know if you agree or not. Marco. I think that if we’ve got a good real estate deal, it’s our obligation to educate people in our sphere of influence about what we’re doing. And I said, educate, I didn’t say pressure. I didn’t say hard, sell them on anything. I didn’t say manipulate them or twist their arm into investing with you. All I said is educate them about it and allow them to make their own educated decision as to whether or not they want to invest with you or not. Does that make sense? And then when you are working with a friend or a family member, even though you do know each other very well, or, you know, each other quite well, treat it as a professional relationship, treat it as if they were a complete stranger. They’re not a complete stranger, but they treat them like that. So you would have, if you were working with a complete stranger, you would make sure that you’ve got all the proper legal documentation set up.
You would make sure that you’ve got the right joint venture agreements or the right corporate structure set up. You would make sure that that person had independent legal advice and had their own legal beagle, taking a look over everything. You would do all of this stuff, right? If it were a stranger, we’ll do the same thing. Even if it’s your brother do the same thing. Even if it’s your cousin doing the same thing, even if it’s your best friend for all your life, treat it seriously, treat it. Don’t do the whole, here’s the biggest mistake, the spit, and the handshake. Yeah. That’s the recipe for disaster. So realize that you’re helping these folks do something they cannot or will not do on their own. And that’s investing in real estate, B – a good real estate investment. And in my opinion is far superior to virtually anything else out there. I mean, think about it. What other kinds of asset class has as many different profit centers as a real estate deal. What other kinds of asset class is as solid intangible as a real estate deal? What other kinds of asset class do we exercise as much control over as we do with a real estate deal? I don’t know of any other ones. So if we don’t educate people about this, we’re actually doing them a disservice
Well said. I certainly agree with you. You know, experience has taught me that if you find the right deal, if you have a good real estate deal, the money will find you. It’s often not the way or the other way around. If you have a good deal, there’s money out there that is looking for the right place to go and work, and it’s looking for the right deal. So I’m not saying that the deal should come before the money. I know that you and I do agree with you that you should have your network in place. So you have the money available when you do find the deal. But I think it goes both ways. I know from experience that when you have the right deal, the moment you actually start talking to people, the right people who are ready will come forward, they’ll voluntarily come forward and say, Hey, tell me more. Because you know, I’ve been thinking about this or I’m in the market, or I am looking or whatever the case is, but you’re certainly far more ready if you have that list of people that are nurtured, that you can approach when you do have that good or great deal in hand and just say, Hey, I’ve come across this deal. I’ve done my due diligence and underwriting. It’s ready for acquisition, or maybe I even have it under contract. And I have, you know, a certain amount of time. Would you like to talk about it? So I think I think really you should be doing both at the same time. If you want to be a real estate investor, there’s definitely a place for what you’re doing. Absolutely!
So yeah, Dave, any final comments? I know we can get pretty deep into the marketing side, but I don’t want people’s eyes to glaze over because it just goes back to the whole thing of paralysis. And this is not overly complicated. It’s just a matter of having a system to follow, to be able to build that list and nurture it.
Yeah. Any final words, it would be, you know what, it’s all about taking that ownership of the fact that you have massive value to bring to the table that what you do as a real estate entrepreneur is a value to the right people, right? And it’s all about the fact that because you bring that value to the table, you don’t have to be begging you don’t have to go with your hat in your hand. Grovelling to raise capital is all about the proper positioning. It’s all about doing things in the right order. And when you do it right, you can actually get investors coming out to you, reaching out to you, asking you about your deals. And I tell you what that conversation is so much more pleasant to have versus you trying to push your deal onto somebody.
Totally agree. Dave, tell our listeners how they can find you or get more information about this process and what you’re talking about.
Well, I’ll keep it super simple, Marco. And thank you again very much for having me on the show. If people would like to find out more about my five-step money partner formula, I invite them to get a complimentary copy PDF copy of my book, the money partner formula, and they can get that at investorattractionbook.com, again, investorattractionbook.com or traded a book for your name and your email address. That’ll get you into my, into my sphere. And then you’ll hear more about me and what I’m up to and how we help people accomplish this.
Awesome. Well, I really appreciate you taking the time, Dave. This is very interesting, and I think there’s a lot of people out there that can use this information because they are at a point or where they will get to a point where they’ve kind of hit the wall in terms of the number of deals that they can do, but they have the money available to them outside of their you know, outside of their own four walls. And it’s just, it’s in their network and the people that they know that they haven’t really talked to in a while. So anyway, I appreciate everything that you’ve contributed and that’s it for today.
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