True or False: Private Investors are Your Customers.

Ok...I probably gave this one away. If you are a real estate investor looking to do more deals and grow your business and you answered True - go to the head of the class. For everyone else, it's time to go back through a review.

Very few investors know who their target customers are when it comes to their operations (e.g. flip, wholesale, apartment). Therefore, it's no big surprise that they don't know who their target private investors are and, more importantly, that private money investors are their customers. Or clients. Whatever you want to call them, they should be "A #1 important" at the top of your list.

Think of yourself as having a retail store. The product you sell is your investment opportunity. Your goal is to sell as much as possible, of course.  How would you set up your merchandising? How would you bring people to your stores? How would you interact with them once they arrived? How would you follow up with them once they left? What would you do to ensure that they sent their family and friends to you?

There are far too many real estate investors who want private money, but their store is open for about 1 hour a every other day, the lights are dim, the place is a mess and nobody greets them when the come in and it was a matter of sheer luck they even found the store. This is a recipe for a store being out of business - quickly. Would you run a store this way if you owned one? Hopefully not. Why treat private money as any different? Why turn away investors, or worse, have them not even know your opportunity exists?

More often than not, you aren't getting private money because most people don't know about investing with you, don't know how to get more information about investing with you or know the steps to placing funds. If you think of private investors as your customers, you can start using the following checklist:

• Attraction - how are you attracting them? Are you targeting? If you had a hunting supply store, you wouldn't advertise your weekly specials in a magazine focused on animal lovers, so make sure you are aiming your messages in the right direction
  
• Customer service - are you providing good levels of service to existing and prospective investors? How quickly are you returning phone calls? How often are you soliciting referrals?
  
• Follow up - are you following up with contacts? After meetings? What about other communication? Remember the old adage in sales that goes something like: "the average customer buys after the 5th-7th call? Well, if you keep this in mind you can set your private money goals correctly. You may not get them to write a check after the first time you talk to them, it might be after the 3rd or 4th time you talk to them or they get something from you - so follow up is important.

When you starting thinking of private investors as your customers, and raising private money as a marketing process versus a financing process, you'll have a flood of new investor money in a hurry. It does require you to shift your thinking just a little bit - but the rewards are well worth it.