Building Relationships to Raise Private Money
Building Relationships To Raise Private Money
Relationship building is a critical component of large-scale real estate investment. This article discusses steps new investors should take while they build their portfolio to simultaneously establish and maintain a network of investors designed to support future opportunities. Connecting with people and investing in relationships, while not intuitive for everyone, is a learned skill that can be enhanced over time. And since some people are inherently social, the benefits go far beyond the financial. As the Dali Lama said,
“We human beings are social beings. We come into the world as the result of others’ actions. We survive here in dependence on others. Whether we like it or not, there is hardly a moment of our lives when we do not benefit from others’ activities. For this reason, it is hardly surprising that most of our happiness arises in the context of our relationships with others.”
Opportunities to Connect
The first step in relationship building is to create opportunities to connect with like-minded people.
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Real Estate Meetups and Forums
Attending a real estate meetup group or conference is an easy way to start. Meetup.com and the Bigger Pockets Events pages list a variety of meeting opportunities sorted by city for those starting out. Participating in online message boards such as the Bigger Pockets Forum or a Facebook group can serve as a digital introduction and can lead to future in-person meetings.
For example, my friend, Frank, has been a regular in one of the FB real estate groups and responded to many questions from people. This allows him to build his credibility over time by providing value to others. It also presents him as the authority in other peoples’ eyes.
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Volunteering
Another great way to connect is through volunteering for an organization you believe in. Nonprofits such as Open Architecture, Habitat for Humanity, Amnesty International, Charity Water, or local cultural, human rights, or religious institutions can serve as an excellent platform to connect with like-minded people. Joining a Board for one of these organizations is also a good way to connect with high net worth individuals who share your values.
Another spin on this idea is to incorporate a charitable component into a real estate deal. For example, funding an apartment complex with several units dedicated to art students or a low income demographic. This type of sponsorship can make the deal easier to promote in conversations and pique the interest of those who might not normally care to discuss real estate investment.
As an example, I typically dedicate time throughout the year to organizations serving children in under-served communities. I’ve been meeting some great people at these events and have been able to make great and meaningful connections.
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Hosting events
Hosting private events in your home or at a restaurant or cafe is also an excellent way to get to know new people. Entertaining is becoming a lost art. Thoughtfully selecting guests in order to introduce friends from different social circles who might benefit from knowing each other is one strategy. Another strategy is curating a dinner around a theme which will guide the evening’s conversation, a la Thomas Jefferson. See this link for more info on how to host a Jeffersonian dinner. It is not critical to select a real estate investing topic; simply choose something that will resonate with your guests. For example, Krista and her husband once hosted a Valentine’s Day dinner for singles where everyone came with a sonnet to read to the group.
Adding Value
As your network grows, it is important to build trust with others by adding value to their lives. This can be accomplished in many ways.
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Meaningful Conversations
A plethora of instruction for how to have meaningful conversations is available online. The Art of Charm is a podcast dedicated to this (primarily for single guys, but there are some universal gems that can be gleaned by all) and Fierce Conversations by Susan Scott is a thoughtful book on the topic. The prologue of Tim Ferris’ Tribe of Mentors delves into the particulars of phrasing a good question. In a nutshell, rapport is built by asking open-ended questions that spark your audience’s desire to respond to you in detail as well as it shows your interest in them. Once that connection is made, listening carefully to their answer and letting them know they were heard is all you need to do. At conferences, one way to do this after meeting someone new is to introduce them to someone else by concisely summarizing what you just learned about them to a third party. This will signal that you were listening and that you valued what they said.
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Being Helpful
The most important thing you can do to build a relationship is to help someone with a problem they are having, particularly when they are not asking for help. Through your good listening skills as discussed in #1 above, when you discern that you may be in a position to help someone, you should offer assistance. Perhaps you can share a reference for a contractor or realtor that did good work for you or maybe you can connect someone looking for work with a friend who is looking to hire. It doesn’t have to be a real estate-related manner, it can be a personal issue they are trying to solve.. As your network grows, these opportunities will become more frequent. Ultimately, helping others establishes trust.
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Social Media Presence
Another way to add value is to build an online presence by producing meaningful and educational content via a social media platform such as a blog, podcast, or YouTube channel. By providing useful information for your subscribers, you will become an authority in the field. Relationships can be forged this way, especially if you make it known that you will field questions from listeners.
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Hosting Meetups or Conferences
Hosting or speaking at real estate events and/or conferences is another great way to add value to the people in your network as well as to expand on your network. Similar to #3 above, hosting events also positions you as an expert in the field. Another advantage is direct access to other experts in the field who may be speaking at your events. This will allow you to meet and build relationships with other experts in the field.
In conclusion, there are many ways to build professional relationships. As a new investor, it is important to understand the value of this, choose a few strategies that you feel comfortable pursuing, and commit to concentrating on them in order to grow a supportive network.
This article is written in collaboration with Krista Kennedy.
