Table of Contents - #FreeFlowFriday: Investor Timing – WHEN Will They Invest with Dave Dubeau
Welcome to Free-Flow Friday, powered by the Property Profits Real Estate podcast. I am Dave Debeau 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. Now, here's what I want to do. Let's I'm going to try and teach a bit of something that I learned about recently. I think it's really, really high impact for us as real estate entrepreneurs. And and it's about when the heck will they invest?
When will they invest?
All right. That's what I want to focus on for the next, let's say, 15, 20 minutes. Depends on how chatty we are. Just kind of go over this. Right. So a lot of us, when it comes to raising capital, here are some of the big things on our minds. And forgive me for lumping you into this, but this was at least the stuff that was on my mind when I was first starting to raise capital. And that is, how can I get the money to do my deal right. I sell finance my first few deals, ran out of cash, ran out of credit, needed more money. I heard about this whole other people money, other people's money thing. How can I get money to do my deal?
Other Peoples Money
Who's going to invest with me? Right. Who am I going to go after as my investor? So who's going to be investing with me and how much are they going to invest in my deal and when will I be getting their money for my deal? OK, and how much of my profit do I have to give them for their money? So it's all kind of me, me and me. And then the other big thing was when the heck can I get the money? Because I'd like to get it now or yesterday, if possible. OK, we'll ask you guys to put up your hand and see if you can relate. But I mean this at the core of it. This is kind of where a lot of people come into the whole raising capital side of things. And what I want to share with you today is a little bit of a shift in mindset. So, yes, we want to raise capital. That's what we're doing, is for us to grow our portfolios and create our income, our net worth, our lifestyle, all that kind of stuff. And yeah, we probably have to use other people's money to make that happen. And we'd like to get it now. But we also need to be we need a little reality check on the fact that it's not all about us right now. I mean, I know this sounds pretty basic, but it's really important that it sinks in, right? Because typically for most people, it's like, hey, I'm going to run out and I'm going to do all this stuff and I want to get some cash. I want to get it quickly. And there's no problem with that about that, that's for sure. But we lose track of the the long term.
Dean Jackson – Life Guru – Hosts a mastermind group
So recently I've been restudying a very, very smart entrepreneur named Dean Jackson. And Dean is originally from Torana. He now lives in Florida. He was a realtor for many, many years. He's a he's been a realtor. He's a he's a business guy. He's a marketer. He's kind of a thought leader. He's also an investor. So he kind of gets what we're talking about here and very, very brilliant guy. And in fact, just last two weeks ago, October, twenty third and twenty fourth, I think it was I spent two days with him virtually on Zoome paid him a nice, tidy little sum. I think it was around five thousand bucks and got to be part of a little small group mastermind's session. So there's me covering up my bald spot with my baseball cap there with with Dean and some other guys going through that two day mastermind kind of thing. And here's one of the things that Dean brought to my attention. And he didn't invent this or anything like this. He's just kind of reporting on this and this. This applies to whatever kind of business people are. And we're in the business of real estate investing. We're in the business of raising capital that's part of our real estate investing business. So keep that in mind as I talk about this, because it's not directly real estate focused, but it definitely connects.
A story to tie it all together
All right. So there is a company in the States and their whole business is all around following up with people and doing lead conversion studies. Now, what does that mean? That means, for example, who here is familiar with like a trade show who's been to trade shows in the past? Yeah, OK, perfect. What these guys do is that they follow up with people who have shown interest in something. So anyhow, they they follow up with people who, you know, if you fill out like a little questionnaire or something like that or you show interest in something at a trade show. Have you ever done that where you. Our little form or something like that or put in your business card. So what these guys do is they follow up with people at regular intervals. I think it's like monthly intervals for 18 months just to see who has bought something or not. So, for example, you go to the trade show and you're interested in a hot tub. So you fill out you go to the hot tub guy's place and you check off your name or whatever for drawing a raffle. And these guys will follow up with you. And they're not trying to sell you. They just say, hey, Nargus, you want to to and you say yes or no and they keep following up with you. So let's say you've got one hundred people that have shown interest in that hot tub. And what they do is they follow up with folks for 18 months. And over those 18 months, here's what they found. Approximately 50 percent of the people will actually buy the hot tub or buy whatever it was that they showed interest. It might not be from the original people that they looked at it with, but they will take the action. Does that make sense? You guys go along with it here. So have to have don't over the following 18 months. Now, here's where it gets really interesting, because, again, ourselves, just like pretty much every business owner out there. We're looking for the quick conversion, we're looking for the quick. Cash, we're looking for the investors to jump on board right away, and that's really what most of us focus on. And again, most businesses, most stores, most companies, they're really out to get you to buy something today. You know what I mean? Offer sales. You know, we're coming up to Black Friday and pretty soon it's going to be a not. So it's all about by now. By now, by now. But here's the interesting thing. They followed up for the 18 months and here's what they found about when people actually bought the thing. Right. So 50 percent bought 50 percent didn't buy out of the 50. Let's say there's a hundred people altogether out of the 50 people who did buy. Here's what's really interesting. Only seven of them bought within the first 90 days, three months. Only seven people, so about 14, 15 percent. OK. Forty three of those 50 people, in other words, about eighty five percent bought somewhere between month number four and month number 18. Now, when I heard this, it was an immediate light bulb moment for me, it was like, holy crap, OK, this is especially true for us because we're not talking about somebody buying a three thousand dollar Jacuzzi, right? We're talking about somebody investing fifty seventy five hundred grand or more with us. So it might even be a longer cycle before somebody feels comfortable, ready, willing and able to invest with us. Does that make sense? You guys hands up if you follow along here. All right. So let's say we've got our list of two hundred people. You guys have heard me preach about this. And this is what we are we try to do with you is come up with this list of two hundred people and then this is going to be our target group of prospective investors.
Putting follow ups into practice
OK, so. Let's say we start doing the marketing stuff that we talk to you about, right, let's say we start doing the marketing stuff and we talk to you about and over the next 90 days, the next three months, we get 20 people. So 10 percent of your list to show interest in one way or the other. All right. So this might be doing a ninja practice session with you for your presentation. It might be getting them to come to your webinar. It might be getting them to put up their hand, respond to one or more of your marketing pieces. It might be getting somebody to book an appointment with you or opt in for something. You know what I mean? You guys. So they do something, they show some interest. So we get 20 of them to do this over the next 90 days. Well. Over the next two years, if we do things right, we know that 10 of them aren't going to invest no matter what. Right. That's just statistically speaking, just because they say they're interested doesn't mean they're actually going to do it. But the good news is, and this is what we need to focus on, 10 of them probably will invest with us if they're able to over the next 18 to twenty four months. And that's awesome, because for a lot of people, that's way more than you actually need to do, whatever it is that you want to do over the next. A couple of years. All right, but here's the thing. Out of those 10 people, only one and a half, one between one and two of them will actually do this sooner rather than later. So that's the real the real low hanging fruit. And eight or nine of them will invest with you between month number four and month number twenty four if you keep this following in this follow up sequence. That make sense if we do a good job of staying top of mind with them and if we don't turn them off. As well, along with the here. So this was like a really big aha moment for me, because we're already, you know, we're thinking about me, me, me, me, me. I'm ready. I've got a portfolio to grow. I've got stuff to do. I'm ready for your capital. Invest with me now. But if that's all we focus on, then we're leaving the vast majority of the capital still locked up in their bank accounts. You guys follow along in here. So this was a really, really, really big light bulb moment for me.
So what does this tell us?
Just because we want it now doesn't mean they want to invest with us right now. And if we only focus on the hot to trot ones and we forget about the rest of them, we're leaving the vast majority of the cow. Eighty five percent of the capital on the table. So that way we need to always remember we need to play the long game and be patient about this as well. OK, so with that in mind. Here's what I think is a really good strategy to deal with the situation. So we don't want to of course, we want to focus on the quick capital people right away. We don't want to. You know, if they're ready to invest, let's accept gratefully and appreciative they accept their capital, no, no reason not to do that, right. But we want to do it in such a way that we don't turn off the eighty five percent of the folks who could and would invest with this long term. Once they're ready, willing and able. OK, so how do we do this? We need to continually provide value. We need to continually educating the people on our list. Keep top of mind with them. So that when they when time and circumstances change, when they're ready, when they they just finally it's the right time for them, we are going to be the ones that popped to mind. Give me a thumbs up. This is making sense, you guys. Yes. OK, who else thinks this is kind of a cool concept? This is is this kind of is this kind of new for anybody else besides me? Wasn't it? Makes sense. But I didn't know the numbers with this dude. I had no idea that the numbers were this lopsided. Right. 15 percent short term. Eighty five percent longer term. So that's really important. So.
Implement a strategy
Here's how I think we should do it, so we always want to encourage people to take the next step, the next step with us, with the whole system that I talk about anyhow, isn't to cut us a check for one hundred grand. The next step with us is to book a one on one meeting and have a conversation and see if it's a good fit for us, if we're a good fit for them, if they're a good fit for us, if what we're doing meets what their goals are and vice versa. Right. That's what we want to do. So we always want to encourage people to take that next step, but we want to do it without being a pain in the butt, without being high pressure. And one of the things that Dean Jackson has introduced me to, which I think is absolutely brilliant. Is he uses what he calls a super signature at the end of his emails, a super signature, so whatever the heck he's talking about his email, and then at the end, he adds this. And whenever you're ready, here are whatever two different ways or three different ways. I can help you see if real estate investing is a good fit for you. Right. One way, it could be a opt option for my free video on the 13 ways real estate rocks and everything else sucks. Rent or take a look at my upcoming webinar on the seven to profit centers real estate investing or grab a copy of my book, No Sweat. Real Estate Investing or book any one on one conversation. And let's see if this makes sense for you. Here's my here's my college. So we got different options that people can take depending on their comfort level. Everything's moving them towards that final objective, which is to book a one on one meeting with us. 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.
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