ARTAND

LIKE A PRO

THE

CAPITAL

written by Reed Goossens

SCIENCERAISING

4P RULE— THE

OF

written by Reed Goossens

INTRODUCTIONWell Done! You have taken the first step towards raising CAPITAL like a PRO and downloaded this eBook. My goal is to give you the tools you need to successfully start raising capital to fund your real estate deals. Having a skillset that will allow you access to more capital will mean you can close on more deals and ultimately scale your real estate business.

This eBook has been designed to outline the first 4 steps to start successfully raising capital like a PRO. In just the past 12 months I raised capital for, and am the general partner, on real estate deals valued over mill. I have developed the “4P Rule” based on my personal experience raising capital, countless investor meetings and presentations, some yes’s some no’s, and observing other people who successfully raised capital for their real estate businesses.

I hear a lot of people tell me “I don’t have the capital to get into real estate,” or “Once I have saved enough money I will do my first deal . . . ” I have realized that these are just excuses. People don’t know that you can have an unlimited amount of cash to close on your deals by implementing my 4 simple steps which I have coined the “4P RULE.”

The skills that you will learn in this ebook are designed as a guide to change your mindset about the world of raising capital. Yet, at the end of the day I can only guide you so far. Taking action, and the way you implement these steps, is what will determine your success as a real estate investor and entrepreneur.

You are a Champion for taking the first step towards achieving financial freedom and success!

Reach out to me at www.RSNProperty Group.com if you have any questions or you want to chat about capital raising and perfecting the system.

IN THIS EBOOK YOU WILL LEARN:

How to present yourself to potential investors

How to develop credibility even if you haven’t completed a deal yet

How to conduct investor presentations

How to create a mindset that will open up a new world of capital sources for your deals

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P – PROFESSIONALISM P – PITCHP – PRACTICEP – PATIENCE

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I want to introduce you to my “4P RULE.” Four basic steps

everyone can implement to start raising capital like a PRO;

CHAPTER 1 : The Power of Rais ing Capital

f rom other People

1Professionalism

2Pitch

3Practice

4Patience

x Mindset: First and foremost let’s talk about your insecurity about raising capital from other people. There is a lot of

money out there that is looking to be placed in a good deal in order to get a good return on investmet (ROI). Stocks are volatile and placing capital in a bank is dubious. Investors want high returns.. PLAIN and SIMPLE. The essence of raising capital is that you are providing a conduit between people who have capital, and good deals that will produce a solid ROI.

Trust me when I say there are a lot of people out there looking for a good ROI. It’s your job to find those people.

x Access to more capital = more deals Funded = scale your real estate business! Even if you have your own capital to

invest, one day it will eventually run out! That’s a fact. No one has an endless supply of personal cash. There are only so many deals you can do with your own money. When you have a skill set where you can raise capital from other people, the sky is the limit. You will accumulate more deals, as you will now have more access to capital.

x Leverage: Using other people’s money (OPM) to fund your deals is the ULTIMATE LEVERAGE OPPORTUNITY. You are

leveraging OPM to buy more deals and grow your business; In turn, investors have the opportunity to leverage your abilities to find and operate lucrative deals that they themselves would not have access to. These investors want the benefits of owning real estate but may not necessarily have the time or energy to find great cash-flowing deals that produce an excellent ROI. Its is a win-win situation for everyone involved.

Think about the founder’s of Facebook or Google. They don’t just have a mountain of cash for them to use to scale their businesses. They use OPM to scale their business. They offer investors a good place to invest their money and in return the investors get a good ROI. It is a win-win situation for business owners and for the investors. Finding investors to fund your real estate deals can also be thought of as a partnership between investors, you, and YOUR deals.

Takeaway Tip: To grow your real estate business you need to be doing more deals. Raising capital from other people to finance your business is how you can seriously scale.

You now understand the benefits. Now lets get CRACKIN’ and into the nuts and bolts of the 4P rule.

These 4P’s are fundamental to your success, but before we dive into the nuts and bolts I want to quickly explain the benefits of raising capital from other people rather than using your own money.

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CHAPTER 2: Professional ism

The number one thing I hear is : “I don’t have enough credibility to start raising capital”. . . Let me

let you in on a little secret . . .no one is born with 10 years worth of experience, we all have to start somewhere and that is the purpose of this eBook.

To start raising capital successfully, being professional is the most important aspect when starting out. Most real estate PRO’s had former lives in different professions, and we have all developed an array of skills that can be used when raising capital. I was a former civil engineer. I had no idea about the world of capital raising, but I had been in the corporate world of structural engineering for approximately ten years. During that time I developed good interpersonal skills, I knew how to conduct meetings, I was punctual, and I was well dressed. All these attributes add to your ‘professionalism.’

Takeaway: Draw on skillsets that you have developed in other professions when you start raising capital.

When you are starting out and you don’t have years of credibility, people will ultimately invest in your deals because they are investing in you as a person. This means you are a business. You are the person that links investors to great deals, and you are the knowledgeable one when it comes to buying real estate. As such, you need to position yourself as a ‘person of influence’ within your immediate sphere of friends, family and colleagues.

How do you position yourself as ‘person of influence?’ Simple. You need to develop your personal brand! You will need to develop the following:

1 You will need a website: It is 2016 and investors will google your name, so you will need a presence online. Get yourself a good, clean looking website. You don’t have to spend much

money but having a professional looking website explaining what you do, and the value you bring to the table, is very important. (use: wix.com, or square-space) . . .as time goes on your will refine your website. Get friends and family to help preview and provide feedback on the layout and design.

2 Get Professional Headshots: Replace that ‘Daggy’ looking headshot on Linkedin with one taken by a professional. Get a bunch of them taken so you can put them on your website,

and social media platforms. Go to taskrabbit.com or yelp.com, you can spend as little as $50 for a set of headshots. You may feel awkward, but get over it and get them done.

3 Create a logo: Create a business logo. Go online to either upwork.com or fiverr.com and have a simple logo designed for you by a professional. You can spend $100 for a basic

logo. This logo will go on all your business marketing (ie: flyers, business cards, letter heads etc.). Like the website, you want a clean looking logo — but don’t go over the top; hire someone online to take care of it for you.

4 Social Media: Create social media pages for your business with your new logo and links to your website. This will increase your online footprint and in turn emphasize you

as a key person of influence about real estate investing within your sphere. And the best thing is social media (Facebook, twitter, Instagram) is FREE! Don’t have time to manage all your social media accounts? Then check out hootsuite.com. A great place to manage all of it in one place.

These four steps are all very simple but powerful ways to increase your online presence and give a good first impression when investors search for you online.

Takeaway Tip: As your business develops you must always emphasize your personal brand; this is why people are investing in your deals. They are investing in you! Remember that.

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CHAPTER 3: P itch

There are three main things you need to develop for “Pitch:”

You will need to develop the following:

1 You will need to develop an “elevator pitch”: a short 30 sec succinct speech that clearly summarizes what you do. As you start making a transition to becoming a syndicator (aka

a person who raises capital for real estate deals) a pitch is a great way to help with creating the right mindset, and educating people on the new direction you are taking with your life.

Example Pitch:Random Person: “What do you do?”You: “I am actually a creator. I create passive income and long term wealth for my investors by purchasing multifamily apartments. Essentially investors come to me as I have great deal flow and I can help them create a great real estate portfolio of cashflowing properties.”

Simple, easy, straight to the point. An elevator pitch should be developed in such a way that you get your point across straight away in a few short sentences, whilst creating the intrigue with your subject that they want to know more about you and what you do!

2 Create a Pitch Deck (aka Sample Deal Package) The number question I get asked is “how do I become more credible with investors when I don’t have a lot of experience

buying multifamily deals?,” or “you have never done a large rea estate deal.” A pitch Deck does exactly that. It creates credibility out of thin air with your potential investors!

What is involved with a pitch deck?Simple, it is a professional, clean and well-designed document that summarizes a potential deal. This is a package of a sample deal you have done the analysis on but you might not have it under contract.

Step 1Go online to Loopnet.com and look for deals in your target market.

Step 2Find a deal that is presented by one of the bigger brokerage firms (ie: Marcus Millichap, Keller Williams, CBRE); these companies usually have great offering memorandums (OM).

Step 3Take the OM and create your own sample 4-5 page deal package using your analysis of the deal. It is crucial you analyze the deal using your own spreadsheet. Firstly, it is good practice, and secondly you will be able to see if the deal actually makes sense. Remember: This is a sample deal package; you can change the purchase price etc. to reflect targeted investor returns.

Package Layout • Title Page: Clear title “123 ABC Smith Street – XX Units – SAMPLE DEAL PACKAGE,” Also include a picture of the property, & your logo.

• Executive Summary: A simple welcome letter to investors giving an overview of the package in a couple of paragraphs (this needs to be short and sweet).

• Deal Description: Size, age, # of units,

• Market Overview: suburb, renter demographic, employers in the area

• Financials: Rent roll, operating expenses (P&L) Investor Returns: create a simple table of the returns investors can expect

• Pictures of the deal and maps of the area.

• A Clear investment strategy of how you intend to improve cashflow, and force appreciation.

• Include a small sensitivity analysis (ie: show two potential exit CAP rates, one conservative the other less conservative).

As this is a fictitious deal (you don’t have it under contract) you can tweak the purchase price, or the NOI, to whatever you want it to be so as to match your investment criteria (my Cash on Cash criteria is min. 12% once the property has been repositioned). The purpose of this package isn’t to deceive; it is a presentation of an ‘example’ deal you are looking to find and put under contract. Creating a package will illustrate to investors:

• Your knowledge of the deal

• Your professionalism

• Your knowledge of different investment strategies

• Your expertise of investment strategy

By doing this you will begin to build credibility with your friends, family, colleagues, investors and it will change your mindset, as you will start to live & breathe deals. Make your package your own; use your own logo, contact information and formatting/color scheme.

Remember: Your goal with this package is to change people’s perception of you. You want to be ‘that go-to real estate investing expert’ within your sphere of influence!

3 Include Bios’s of PartnersSurround yourself with successful partners and mentors — people who have successfully completed a transaction

in the past. This is the most important part of your sample deal package. Having people in your team that you can leverage their experience is important.

In your package you will need to include your bio in the deal package. Summarize your existing experience (it is ok if you don’t have a lot of experience in real estate). Include the bio’s of your mentor and any other team members:

• Your mentor

• Other partners

• Property Manager

• General Contractor

Now you have a great package of a sample deal that looks professional, and you have formed a great team around you. This will create a lot of credibility with investors and brokers, and a sense of worth.

Takeaway Tip: It is important to surround yourself with people who have done this type of investing before. You will be able to draw on their experience and leverage their skill set to enhance your own.

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I t’s time to now go out in the world with your incredible looking sample deal package, along

with a new found confidence as you are now living and breathing multifamily investing.

I bet you are asking; Where do I find investors?

Well that is easy, investors are everywhere and usually where you least expect it!

Start with you mobile phone: You have a lot of contacts in your phone. The law of 6 degrees of separation applies to raising capital, however it is usually more like 2 or 3 degrees of separation between you and your potential investor.

Start reaching out to your friends, family, and colleagues and begin having conversations with them. Explain what you are doing. This is a numbers game and the more you talk real estate the more confident you will become. Remember to keep it casual at first, then as a you continue to have more and more conversations ask people if you can send them an example deal. Then email them your sample deal package promptly with a professional follow up.

Then follow up with an email, phone call or msg and ask if they are free to meet up for lunch or coffee. You want to be having as many face-to-face meetings as possible. I have a lot of success when I host a small investor luncheon. I reach out to a number of people I have sent the sample deal package to and ask them to attend my luncheon (you can even offer to buy everyone lunch). Who can say no to FREE lunch?

Once you have people at the luncheon you want to walk them through your example deal package and talk to them about:

• Benefits of investing in multifamily real estate

• The power of increasing NOI, which in turn increases cashflow and forces appreciation.

• Explain the investment stagey for your example deal (ie: increase rents, reduce operating expenses)

• Example investor returns

• Exit strategies (renovate – stabilize - refi - then sell)

• Financing options

• Deal structure

• Answer any questions (click here to see a summary of the most common questions I get asked by my investors...this is FREE for downloading this eBOOK!)

• Capital commitments: you will want to gauge the type of commitment people might have.

• The final step, and the most important is get REFERRALS!

Some people you meet with will not have the capital to invest, but they might know of people who do! This is how you grow your business; via referrals.

CHAPTER 4: Pract ice

Networking Events!

Get to as many networking events as possible: Attend your local real estate investing clubs. These places are full of potential investors. Aim to get to 3 networking events a month, and aim to have coffee or lunch with at least 5 new investors each month; this will expose you to a lot of people, it will make your pitch better, and it will increase your database.

Start a database of every investor you meet; log their name, email address and phone number. When you start building your investor list it will surprise you how quickly it will grow. If you meet up with a potential investor/s have a ‘comments’ section and summarize the conservation, the date you met up, and if they have any potential referrals, or if they are interested in investing. I use simple spreadsheets that I update on a weekly basis to track all my conversations with investors. Client Relationship Management (CRM) tools like salesforce are great, but when you are starting out a simple excel spreadsheet will do just fine. Takeaway Tip: People like to touch and feel things; print a few copies and take them to investor meetings.

TOP 6 PLACESTO FIND INVESTORS

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4321 Networking Events!

Via my Podcast– Investing in the U.S – An Aussie’s Guide to US Real Estate

Referrals

Online Real Estate Blogs (bigger pockets)

Alumni Events

Coffee Shops (set up a small sign ‘I invest in Real Estate, ask me how you can too’)

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CHAPTER 5: Pat ience

A t the end of the day raising capital takes time; building up a network of investors that you can call on to invest in your deals will take years to do. Pace yourself, set small goals to help you achieve the bigger goals. Aim to meet up with 3-5 investors per month (especially if you are still working full time). It is a numbers game so

the more people you can meet with the better!

As your investor database starts to populate consistently check in with people to see how things are going and update them on your progress. You might meet someone tomorrow but they may not be in a position to invest at this point in time, however in 3, 6 months time they might be! If you are consistent with your database, consistent with your meetings, constantly attending meetup events, then over time you will develop a fantastic circle of investors that will look to you for great deals, again and again!

The old saying: “if you have a great deal you will always find investors” is a load of BS. Typically people who say that have never actually raised capital before. Getting people to invest in your first deal is bloody tough! That’s why it is so important to surround yourself with a team (ie: mentor and/or partner) who has done this before. Leverage their experience and knowledge of real estate to help you show your potential investors the vast experience of the team you have created.

Takeaway tip:The key to start raising capital is to form a great team, be persistent, and never give up! It will not happen over night but if you keep meeting potential investors, maintain an investor database, and continually check in with your database it will happen! The more people you meet the bigger your network is, the more capital you can raise and the more deals you can get done!

If you want to continue working with me email me at info@rsnpropertygroup.com and we can continue the conversation.

TWO BONUS GIFTS! Click here to request

your bonus gifts1. “Top 21 questions asked by a

potential investor” 2. Apartment Investing

Resources

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Subscribe to my FREE Podcast on iTunesfeatured at www.rsnpropertygroup.com/podcast