$100,000 is what you need to close your deal. And it’s a good one at that. Suppose you’re at the point now, where you have enough information on your deal and you have a few prospects of who you could approach as investors for your deal. What’s next is getting your investors to write you the check?
The Trust Factor
Again, it all goes back to the trust issue. Do the investors trust you with their money? Let’s look at trust for a second. Do you trust someone yourself? Maybe a spouse, a parent, or a best friend? Why do you trust them? I bet it’s because you know them well and they know you well. The intentions of both sides are for good, right? Well, how did you get to this point in the relationship?
You’ve done several things. You spent quality time together even in the short amount of time you may have known each other. One of you or both of you are probably good listeners. There is also mutual respect for one another.
Well, to get investors to invest with you, you must establish the same rapport and trust in each other.
Selling versus Counseling
Since you probably don’t have years to develop this with all the potential investors you have in mind, you’ll need to act and develop quickly. Here’s how: don’t sell to them. Counsel them instead. Recall the old saying, “People don’t care what you know until they know that you care.” Every successful money-raiser is a practicing counselor.
How do you react when someone attempts to sell you something before they know if you need what they’re selling? You put up an automatic guard, right? To overcome this, if they asked you a few questions first, they probably would have been a little more successful. Take a counselor’s approach instead.
5 Tips to Becoming a Better Money-Raiser Counselor
#1 Build Rapport First And Foremost.
#2 Investor Needs. Ask questions such as do they need monthly or quarterly pay-outs or can they wait until the investment is at the end?
#3 Investment Objectives. Ask questions about why they want to invest. Is it for their kid’s college fund? For retirement? To establish a trust fund for charity or the poor?
#4 Risk Tolerances and Return Expectations. Ask questions pertaining to their previous investments, such as stock or other real estate. Ask how risky it was to them. Next, ask what their expectations are for returns on the investment. Are they expecting a 5%, 8%, 10%, or 50% return on the investment? Get a feel for this. And don’t forget to relay to them that you’re number one priority is to protect and preserve their investment with you.
#5 Life Goals with Investments. Ask what their ultimate goal in life is. Is it to retire and move to Hawaii? Become a missionary in Africa and live there for the next 20 years? Is it building a school for at-risk kids in poor neighborhoods?
Till next time,
Peter Harris, TheApartmentConsultant.com