Many of the people I deal with use investors to buy into or lend money on real estate deals. Sometimes it's for other things -- like financing note purchases, growing a business, or just cashing a few things out so that all your chips aren't bet on the same hand. Whatever the case, I am often asked what the best way is to get to know an investor. The best conversation starter I have seen when talking with a possible investor?
"Hi. You want in on my deal?"
Then be quiet and see what he says. Try it sometime.
Notice I did not say, "Hi. You want in on my deal? Let me tell you about it......blah, blah, blah." Telling all about the deal right away is usually a mistake. Yes, you have to KNOW everything possible about the deal, but don't give them the long spiel right out of the gate. Why? Because it is disrespectful.
Ask an engineer about "signal versus noise" and how difficult it is sometimes to tell the difference between something important (the signal) and all the blather (the noise).
A serious investor is somebody who is ready to put some of his money to work if he finds something that makes sense. He makes decisions according to his criteria -- not yours, and it is almost certain that some of them will be different than yours. The disrespect is making him listen to (suffer through) a lot of "stuff" to glean the occasional factoid -- something actually useful to his decision process.
I suggest you always try to have something for sale at whatever level your investor would be interested in playing. That is far superior than just talking "in general" or "in the future" or "I have deals that come up all the time". What many call thinking things through, or doing the due diligence, is (too) often a person's subconscious trying to protect him from failure. The best salesmen are the ones that are the best at working around that fear of failure.
Want more investors? Find deals, tie them up on contracts that give you long enough to go out there and beat the bushes, then go "sell".
John Groom, CPA, received his undergraduate Bachelor of Science degree in Accounting from UCLA. Originally with Peat, Marwick, Mitchell & Co. (KPMG) in Southern California, he has now been in private practice for over 25 years. Besides his consulting, tax practice and speaking engagements, he is also an investor and landlord.
John rarely has products for sale. When he is hired to speak, it is generally to teach or coach knowledgeable investors and business owners who have already invested a lot of time and money in acquiring their own expertise on business, real estate and income tax matters.
He has several hobbies, some of which involved seeing how fast he could make a car or a motorcycle go around in useless circles without killing himself. He has moved past that now, but still teaches defensive tactics at a local sheriff's department.
Get to know and learn from John and other experts in Las Vegas at the Paper Source training "Profits In Non-Performing Notes" Nov. 20-22.