Table of Contents - #FreeFlowFriday: Explaining Your Deals to Investors with Dave Dubeau
Welcome to Free-Flow Friday, powered by the Property Profits Real Estate podcast. I am Dave Dibble and I'm very excited to give you an over the shoulder learning experience around raising capital, as well as other tips, tricks and strategies to help you on your real estate investing journey. So let's start. Let's discover together. Somebody is interested. Oh, crap. Now what? Let's say somebody shows some interest in what I'm up to with real estate buzzing, how the heck do I explain it to him? How do I talk to them about what I'm up to with my deals? All right. So, for example, trying to explain everything over the phone, bad idea. Why is this a bad idea? Because it's kind of a you know, especially if you're talking to a person who hasn't invested in real estate before, which chances are that'll be where most of your prospective investors are. They they might have purchased their own home, but they haven't. You know, over 90 percent of people have never purchased an investment property. So we trying to explain it to them all over the phone. First of all, it's too much detail. They're not going to be able to capture it. Second of all, they can't actually see anything. And a lot of us are are more visual learners than auditory learners. And the other big thing is you can't see them, so you can't see their body language. You can't see if they're really understanding what you're talking about or looking confused, dazed and confused. Right. So the phone, I think trying to explain stuff on the phone is a bad idea. The other old idea, you don't get that, get the Sharpie in the and the pen and draw some lines, do the the Amway presentation idea. I think that's a really bad idea as well, because. Your deal is too complicated to explain that way even simple deals have a little bit more involved than what you can just be writing down on a on a piece of paper. Now, I have seen some guys and gals do this effectively, but I haven't seen them do it effectively, consistently, very, very few people can do this effectively and consistently. And quite frankly, they're leaving a lot out of the picture. Right. So they probably just talking about the high level pros of the deal and not talking about any of the potential pitfalls. They're not explaining exactly how things work. It's just a lot of razzle dazzle. And long term, that's not going to be very effective. Right. And again, it's hard to do this consistently. That is hard to do it well consistently. But remember, this isn't like a MLM presentation at MLM Business Opportunity where it's like three hundred and ninety seven bucks to get started. We're talking about getting people to invest fifty seventy five, one hundred two hundred three hundred thousand dollars or more with you. It requires a little bit more than just trotting out a few pictures on a page right now. What about going to the other extreme and bringing hauling out your property analyzer and your spreadsheets and your data and and, you know, a whole pro forma all this contracts and the whole bit and just kind of laying it all out and going through every bit of that with your perspective investor. Another bad idea and chances are I know quite a few real estate investors tend to be analytical sorts. And if you're analytical, that's great. That's a very good strength to bring to real estate invest. Personally, I'm not all that analytical, but my big brother Dan is. And he kind of had this challenge. So when he was explaining things to prospective investors because he's kind of a numbers guy, he figured everybody else is a numbers guy, too. And they aren't right. 90 percent of people are not analytical. They're not numbers people. They're not dumb. They're just not really into super duper detail. Right. So when he would present things, when he would show them stuff, they'd get that glazed over. Look, they kind of the old lines would roll back in the back of the bore them to tears is basically what they would do. Right. And nobody nobody wants to say, you know what, Ed is too much. I don't get it. It's too complicated because nobody wants to look stupid. So he lost out on many, many, many prospective investors because he went too far the other way. He gave them too much information. Yet there's a delicate balance there between too little and too much. You going to have enough that people can make an educated decision and know the big picture? You have to have all the details available if they want to see it, that's for sure. But you don't want to go over that, especially in your first investor presentation. All right. Now, what about the whole sales thing? What about always be close? Well, I think that's a terrible idea, right? I mean, that's old school sales 101 from nineteen fifties. Nineteen sixties, Mad Men on TV, whatever, but that's not the way you need to do it. In fact, that's going to turn way more people off than it's going to work for. And here's my thoughts on this. If you're have to close somebody on investing with you, if you have to pressure them, if you have to manipulate them, if you have to do any of those sleazy sales closing techniques on them to get them to invest their seventy five or one hundred and fifty grand with you, it's setting things up for disaster for you and for them further down the line. Why? Because when somebody feels pressured into something or or tricked into something, they're going to feel resentful against you. And the first time there's a hiccup with a deal. And let me ask you this. Has there ever not been a hiccup with a deal? Right. First time there's a hiccup or a challenger problem, they're going to want to jump ship and they're going to want to take their money with them. And that's going to cause you a world of hurt. Right. Plus, the other ideas. We want to be working with our investor partners long term. This isn't a quick wham bam. Thank you, ma'am. Kind of thing. This is something it's a long term relationship that we want to be developing with people. And we also want to encourage them to refer us to their friends and their family. So we don't want to piss people off, pressure them, manipulate them, trick them into investing with us. All right. It just doesn't work. Well, all right. So and what about being a super slick presenter with a presentation? You just got your presentation in your super smooth, all that kind of stuff. Well, that's great if you're that way, naturally. OK, but here's the thing, right? Remember, always remember, people need to know you, like you and trust you in order to invest with you. So if your normal self is pretty easy going laid back, not a super slick presenter kind of person. And then you get the old commercial voice on and you get the old commercial demeanor and you're doing your presentation and it seems like it's not you, then you've killed the trust, right? You seem it seems fake. Why is this fake? Because it is fake. It's not you. So what you want to do is you want to be the best version of you, you want to be natural, you want to be relaxed, you want to be confident with the way you present your investment opportunity, but you don't want to come across as overly slick or over overly practiced. Does that make sense? All right. So what's the solution? That's the solution to this is to have a super effective what I call a slide well, a slide show presentation, like a PowerPoint or a keynote presentation, something that you can use on your laptop. That's my preferred way. You can use it on a tablet as well. That'll work as well. But something that you can take people through in a logical order. Now, the reason I like slideshows, multiple, multiple reasons for the reason I like a really good slideshow. Number one, it keeps me on track and make sure I cover all the bases, all the questions that I want to ask my prospective investor to make sure they're a good fit. Everything that I want to go over, all of the benefits, all of the case studies, if I have them example deals, the pros and the risks of the investment, how I mitigate those risks, overcoming the objections before we hit them, having a logical sequence to the whole process that not only shows people the deal in the best possible light, but also lets them know what's involved, what the potential risks are, what we do to minimize those risks and what's in it for them. All right. Because when you do it that way, then it's what I call a friendly, grown up conversation. You're not trying to twist somebody's arm to invest with him. You're showing him what you got and you're allowing them to make an educated decision, whether it makes sense for them or not. All right. That makes sense. So having a good, well laid out, well thought out slideshow presentation, it's also much more interesting for the other person. It's more visually interesting. You've got something to look at. They're not just watching you and your crappy drawings on a piece of paper or they're not just listening to you over the phone drone on and on, or they're not just overwhelmed with a bunch of data and spreadsheets. It's a much more interesting process for them to go through. So hopefully that makes sense. And the other thing is you can go through this and you don't have to be sales. You don't have to be manipulative. You don't have to use high pressure techniques either. It's just a good presentation now. I think a really good presentation. So important that, in fact, in my own case, I remember years ago, I actually invested twenty thousand dollars, flew down to Tampa, Florida, and spent a day with some guys who helped me work on one presentation. That's how much emphasis I put on that. And that was money well well invested, because the very first time I used that presentation, I got a three hundred percent return on my investment. I made three times back what I paid to have that done just by the first time I had a presentation. I think about this from your point, your standpoint, how much is a deal worth to you? How much is your average deal worth to you long term? That's how much one good presentation can be worth to get an investor on for that deal. Use the same presentation, get another investor on for another deal. That PowerPoint, that slideshow presentation is priceless. Well, hey there, thanks for tuning into the property profits podcast, if you like this episode. That's great. Please go ahead and subscribe on iTunes. Give us a good review. That would be awesome. I appreciate that. And if you're looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book right back there. There it is, the money partner formula. You got a PDF version at Investor Attraction book, dot com again, investor attraction book, dot com ticker.