Top 3 Tips to be Taken More Seriously as a Newbie Multifamily Syndicator
The question I constantly get asked is “how do I become more credible with investors and brokers?”.
These three steps will bring you massive amounts of credibility, and they are super simple to execute!
1. Create a Pitch Deck (aka Sample Deal Package)
Step 1 is to create a sample pitch deck, this is a package of a sample deal you have done the analysis on, but you might not have it under contract.
Go online to Loopnet.com and look for deals in your target market. Find a deal that is presented by one of the bigger brokerage firms (ie: Marcus Millichap etc); these companies usually have great offering memorandums (OM). Take these OM’s and create your own sample 4-5 page deal package using your analysis of the deal.
What to include in the package?
– Title Page
– Executive Summary: A simple welcome letter to investors giving an overview of the package in a couple of paragraphs (this needs to be short and sweet);
– Deal Description: Size, age, # of units, suburb, renter demographic, employers in the area;
– Financials: Rent roll, operating expenses (P&L) based on your analysis;
– Investor Returns: create a simple table of the returns investors can expect;
As this is a fictitious deal (you don’t have it under contract) you can tweak the purchase price, or the NOI, to whatever you want it to be so as to match your investment criteria (my Cash on Cash criteria is min. 12%). The purpose of this package isn’t to lie; it is a presentation of an ‘example’ deal you are looking to find, and get under contract. Creating a package will illustrate to investors:
– Your knowledge of the deal
– Your Professionalism
– Your Knowledge of different investment strategies
By doing this you will begin to build credibility with your friends, family, colleagues, investors and it will change your mindset, as you will start to live & breathe deals. Make your package your own; use your own logo, contact information and formatting/color scheme.
2. Include Bios!
You will need to include your bio in the deal package. Summarize your existing experience (it is ok if you don’t have a lot of experience in real estate). Include the bio’s of your mentor, and any other team members:
– Property Manager
– General Contractor
– Other Partners
Leverage their skill set and experience.
Now you have a great package of a sample deal that looks incredible, and you have formed a great team around you. This will create a lot of credibility with investors and brokers.
Tip: People like to touch and feel things; print a few copies and take them to investor meetings.
3. Get on Brokers’ Emails!
The final step is to pick up the phone and call the brokers of the deals you are finding online; have a conversation and ask them to put you on their email distribution of deals. Once they send you deals start analyzing them. If you find the deals are overpriced then respond to the broker and state that the property is only worth $X due to the following reasons. This will show the broker you know what you are talking about, and give you credibility. Continue to do this on deals they send you. Don’t be afraid to tell it like it is; brokers know they have overpriced deals. Don’t just analyze one deal and ignore the rest. Analyze all the deals that come through, you will find a lot of people just ignore the broker’s email. It doesn’t matter if it is a deal or not, it is about building rapport, credibility and ultimately build a relationship with the broker where they start sending you ‘pocket listing’ (off-market deals!)… BE consistent!
These are simple actionable steps that don’t require money and will start building your credibility as a deal syndicator, and a person who knows what they are talking about (KEY PERSON OF INFLUENCE)! All you need is the internet and Microsoft Word… What is stopping you?
Remember: Be more afraid of not having-a-go than failing. Put yourself “out-there”, back yourself, and give it a crack… No excuses!