To be Successful at Raising Capital?

Question

The last two months I’ve been doing the research by reading books, listening to Podcasts, talking to people, etc. I’ve written out my goals for the next 10 years and 20 years for where I want to be. Wrote down my whys and am now formulating my hows. The first couple steps doing the research, buying my first duplex seem rather simple in comparison to steps that will allow me to scale. At some point I’m going to need to partner and raise capital from other investors. The partner aspect I get, but raising capital seems more daunting. I really want to study this aspect in great detail to be good at it. So with that, I have three questions see below.

Question 1: In your experience, what are the top 5 skills one should master in raising capital?

Question 2: What are the top 3-5 books I should read? (Michael Blank’s book “Financial Freedom with Real Estate Investing” seemed to have good tips)

Question 3: I know I will need a mentor as well. So what are the top 5 things I can do to add value to them? I want to add as much value to them as possible. They would be taking valuable time out of their day to mentor me. I want to make it worth their while to invest time in me.

Appreciate all feedback even constructive criticism!

Scott E. · Answer

Sounds like you haven't done any deals yet. So I'll reply with that in mind:

1) Top 5 skills one should master in raising capital - Do a deal, do another deal, do a third deal, do a fourth deal, and do a fifth deal. You need to get some experience under your belt before you try to get people to trust you with their hard earned money.

2) None. You've spent 2 months reading books, listening to podcasts, etc. You're stuck in analysis paralysis. Ditch the books and find a local mentor who is actually doing deals. Could be another investor, developer, general contractor, or even a real estate agent. Just get on the phone and start calling people until you find a good fit.

3) This is funny... I hadn't read your last question prior to writing my last response LOL. I have 2 mentors whose time I cherish. They are both 30+ years older than me, they have built real estate empires, and they are at a point in their life journey where they just want to pay it forward to a younger generation. Don't get too hung up on adding value. In my experience the best value you can add to mentors is :

a. Have a strong work ethic and show it

b. Be a sponge

c. Smile often

d. Make sure they know how much you appreciate their time.

e. Come prepared to every meeting you have with them with an agenda (questions, deals to review, etc)

f. Respect their experience and success

AJ Shepard · Answer

@Travis Olszewski

You might want to check these out:√ Books: Raising Private Capital by Matt Faircloth          Best Ever Apartment Syndication book by Joe Fairless√ Podcast: The Capital Raiser show by Ruben GrethYou may already have the skills that you need, you just have to move on to those goals,  first thing I look at is what action can I take today to make that ball move forward in just a tiny bit.  Over time these small increments amount to something large and sometimes unbelievable.Best of luck to you, and happy investing!

Travis Olszewski · Answer

@Colton Hahn thank you. So obvious. Seems no different than when I need to report financials out to my executive leaders. My W2 mentor always told me when presenting to leadership, “don’t BS if you don’t know the question. Simply say I don’t know, but I will find out immediately”. I’ve seen many try to BS their way through and it never ends well.

Colton Hahn · Answer

Hey Travis,

I work in Investor Relations at BAM Capital and one of my duties is raising capital. I have also worked as a relationship manager, and as a loan officer so client facing roles is something I know quite well haha. I mainly want to answer the first question as I think it is the most important, and the most interesting.

In your experience, what are the top 5 skills one should master in raising capital?

Top 4 skills I would say are:

1. Communication skills, being able to package complex information in understandable ways is paramount.

2. Financial knowledge, you cannot communicate complex information well without fully understanding the concepts. Read books and listen to podcasts on real estate to learn as much as possible. Maybe get certifications and/or licenses to bolster your base of knowledge.

3. Honesty, be honest and upfront about what you are offering them, you never ever want to lie to someone about what you do, or are offering. Find out what the other person's goals are. Approach an investor from a fiduciary sort of approach, if someone is looking to invest their last dime with you or the investment does not match their goals then I might not even consider taking them in as an investor. Not only should the investor be vetting you, you should vetting the investor.

4. Work Ethic: Get after it every single day. Rain or sun, every day is a new day to be great.

Honestly, if you can do those 4 things and you truly believe in the deal all other skills are secondary in my opinion.

Paul Moore · Answer

@Travis Olszewski. This is a fantastic question. Very well thought out. And you got some great answers above. I have more to say than I can in this forum but I’ll give you an overview of a few of my thoughts…To raise capital, You can either be a spear fisherman or a grizzly bear standing in the waterfall. The spear fisherman stands by the shore hoping a salmon will swim by in the dark water and hoping he can get a shot and get it to sure. He might get to eat - sometimes. The grizzly bear stands in the waterfall with his jaw unhinged and let’s salmon come to him. That is what you need to do.

The way to do that is to create valuable educational content. That will include writing books, being a guest on podcasts, hosting a podcast, creating social media contact, blogging, creating videos and webinars, speaking live, etc.  Of course you should be doing deals at the same time or partnering with someone who does.

When I started down this grizzly bear path a number of years ago, I did not have the experience and credentials many would say I needed. I learned so very much by pursuing this path and I connected with many I would never have met otherwise.  I’ve had ~ 2,000 prospective investors approach me over the years as a result.

Please PM me and I will be glad to connect on a call with you to tell you more. Again great question!

Brock Mogensen · Answer

A simple strategy is to just start telling everyone what you do.  Branding yourself as a real estate investor that partners with LP investors goes a long way.  Once you start putting yourself in the right circles and letting them all know what you do, capital will start showing up.  As far as books, 'Raising Capital for Real Estate' is a great one.

Travis Olszewski · Answer

Thank you! I will be sure to check them out.

@AJ Shepardundefined

Travis Olszewski · Answer

@Scott E. appreciate the feedback. I will definitely take your advice.

To be Successful at Raising Capital?

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