How To Find 5 Capital Partners For Your Multifamily Deals

What's up, guys? So today I want to walk you through exactly how to find five new capital partners or limited partners for your next deal within 30 minutes. Okay? If you don't know who I am, my name is Jonathan Cronin. Together, my partner and leadership team, we have over $100 million in assets under management, primarily focused in apartments. And we also help people go from 0 to 5 to 10 million assets under management and then to 100 plus million and beyond. So I want to talk to you about this because we literally just did a training or a challenge that was five days, and it was called the five by five challenge. Five capital partners. Five deals in five days. And we had several members that got at least five capital partners. And so it was super exciting. People are super fired up. And so I want to walk you through the key steps of how they did it. In fact, I'll share my screen and just show you some of these investors what they actually did. So here's our community. We don't show this very much, but I just wanted to pull up the win section and show you all these people that got over five investors. It got three different times, found six investors right here. Only three. Three, maybe. Only two said no. This guy right here ended up getting seven yeses. This guy says he got five deals this week. Four from a VA virtual cold caller, one from follow up. Six confirmed investors and made four offers, all from just a few days ago. So challenge was amazing. It was good to see so many people on there putting in the work and making incredible progress. So I know some of you on the YouTube side has been wanting me to kind of COVID some of this. So I want to talk to you really quickly about it. All right? So step number one, and I also want to walk you through the biggest mistake that people make when they just start raising capital for their apartment deals. And I'm going to go through how to avoid that. But number one, write this down. You. You need to first know your buying criteria. Okay? So if you're going to raise capital, you first want to be able to communicate with investors what you're looking for. All right? And so I'll preference that this is not just for those people who have a deal that are currently wanting to raise money for that deal. This is for you. But it's also for those that just want to go ahead and secure limited partners, and maybe you want to do the whole thing. Zero money out of pocket. That's kind of our bread and butter. That's what we walk people through. We Walk our clients through is truly doing it. $0 out of pocket. And so first thing you want to do is nail what is my buying criteria? Okay, where are you buying at, how many units, what's your geography, what are the market you're looking for? Okay. And typically, you know, I have people ask me a lot like how do I choose a market, whatever. So typically as a brand new investor you have to think through what are your strategic advantages because how are you going to separate yourself in the market and make sure that you get a deal other than having to go on this long journey and it taking forever to actually find that next deal. So typically the very first thing I'm going to recommend is leveraging your current market and your hometown as an advantage. But not everyone has to do that. You can totally not do that and go look somewhere else. It's just going to be strongly advised from me that you take a deep dive in that market and truly know your market. So covering by buying criteria, making sure you know your market, I'm not going to spend too long in there, but just typically, I would say within 100 mile radius of yourself, pull list, you know, and then decide what is my proposition to investors. I'm going to do a value add. I'm going to buy the property at a discount. So we're going to hedge our downside, right? We want to make sure that we buy at a discount and we are scaling through value add, improving the property and then of course increasing income, decreasing expenses and then we're going to pay out our investors at the refinance stage or when we sell. Okay, so next you want to decide between 506B or 506C. Now I'm not SEC attorney, but what that is. So, so, so they're not advised. But typically just to give you a brief understanding, these are SEC regulations, the securities Exchange Commission that governs all funding, you know, fundraising for deals and private offerings. Private and public. But we're at 506B being non accredited for non accredited investors. Investors have a net worth of less than a million or you know, there's all kind of stipulations under 200 grand a year in income, whatever, five or six seed, meaning accredited investors, you can publicly advertise. We're typically going to recommend doing accredited just to reduce the amount of people that we're bringing in. In terms of investing in our deals. We'd rather have just one investor or just a few. But at the end of the day it's just whatever you got to do to Close that first deal. So keep in mind, the amount of people that qualify as accredited will also be very surprising. Okay, so that's number one. Know your buying criteria, Decide what kind of offering you're going to create. Typically, you don't have to decide until you have a deal. Right? In fact, this next step, I think, especially if you don't have a deal, it's going to really help you know what kind of offering you know you want to do. Non accredited versus accredited. Okay. Number two, you already write this down. It's called, it's starting with the hot lids. A big mistake a lot of investors do is they want to go cold. They want to, you know, go reach cold or warm investors before starting with their hot list. Okay, so let me explain what I mean by that. So you first want to leverage the people that have the most trust. Because you got to remember, people don't invest in properties, they invest in people. When it comes to the syndication game, when it comes to apartments and pulling money together, your investors are jumping in because they trust you, right? They have confidence in you taking this deal down. It helps having solid evidence, you know, but at the end of the day, whether you're doing a fund or whether you're doing a syndication, you need to understand that it's about trust. So how do you build trust? Well, first they need to know you have a track record. Okay? Okay. So a track record is going to come through your network. If you've never done a deal before, there's obviously a path for you to raise capital or no one else would have done it because everyone started at zero somewhere, right? So track records done through partnerships, join, mastermind, stuff like that. But you want to reach your hot list first, the people that you have the most trust with. Because think about this. It would be a thousand times easier if you were. And this is why our 555 challenge is so effective. Because if you're able to show up with a deal to investors that you have no relationship with, you need to create. You need to find investors to put a million dollars or $2 million in your deal or whatever that amount is. It would be much easier to say, I've already got five investors locked in, right? I've already got 100 grand committed or a million committed, whatever that is. And it's going to make that next hundred grand way easier, right? It's going to make that next million dollars that you need to raise way easier. Imagine going to someone saying, you know, who can give you 500 to a million dollars and saying, I already have five investors on board committed. I just need X amount. Right. It's going to allow them to put trust in you a lot easier. So what is your hot list? It's going to be your friends and family, current masterminds, groups you're a part of, charity organizations, anyone on that contact list. Okay, so again, you know, this is so, I mean, we don't have time to go into cold audiences, so I, I'll do that in another video. Cold audiences would be like, you are raising capital through, you know, a webinar. You're, you're running ads, you know, you're just going and, and doing networking or whatever, which is totally a strategy I would recommend highly. But for your first deal, maybe even two deals, you really may not even need it if you truly learn how to communicate, how to convert investors. Because it's one thing to get in front of investors, even your hot list, but then you truly need to have a pitch deck and have something that can convert investors and allow investors to truly trust that you're going to steward their money well. Right. And that you're going to be able to run the operations and run the apartment correctly. Right. And be able to stay consistent. Okay, so number two is start with your hot list, guys. Don't be dumb and go straight for the cold and think that, you know, you're going to be able to create all these amazing campaigns and it's just going to be deal driven. Now, in our mastermind, we talk way more about finding really good deals than we do about capital raising. However, I believe our capital raising strategies are state of the art. There's no better out there. But, you know, finding the deal is supreme because if you can get passionate about the deal, you can move people emotionally and you can truly create the best opportunities on the market. Number three, write this down, make a script slash text. I'm going to share my screen and give you what I just walked people through on how to reach out and raise capital. So you're going to create a list of people that you know who you want to reach out to, but you first need a script. So I'm going to share my screen and show you this script. Okay, here it is. All right, I'm not going to read this through, but just. Actually, I will read it, but take a screenshot. Copy this. This is going to do wonders. This is literally the key that has really worked for a lot of our members just in that getting that first five investors. Okay, so, so, hi, first name wanted to reach out to you about some, some of the real estate opportunities that I have been working on. I'm coming across more and more private opportunities and it is starting to become more than I can handle on my own. So I'm looking for a few more investors to see if it might be a good fit to partner on. Obviously you'll need more information, but would you consider something like this if it made sense. Okay. And then obviously if you have a deal. So if you have a deal then you can just say, hey, I want to reach out about a real estate opportunity that I have been working on. It's looking like it's going to be a great opportunity, but it's larger than what I can handle on my own. So I'm looking for a few more investors to see if it might be a good fit to partner up. Obviously you'll need more information, but would this be considered you would you consider site this if it made sense. So send one of these two out whether you have a deal or whether you're looking to get into apartments and really want to start cultivating relationships. And then the follow up when they respond saying heck yes, I'd love to invest in your deal. Then you say, hey, thanks for getting back to me so quickly. Started investing in asset class, so multifamily, whatever two years ago and I saw a real opportunity to increase value and capitalize on the current market. If I get discount, buy discounted properties and be able to stabilize something like that. Right. Something quick. And if you don't have experience doing this, you can just say I started moving in the direction of multifamily a couple years ago. Right. Rather than investing, my team and I are excited because this is a unique competitive, you know, because we are really good at finding the best deals on the market. So again, if you're involved in like a mastermind or something like that, it's going to make this a lot easier. Or if you already have a good team around you, it'll make this a lot easier to like, you know, really say my team and I personally, I love this asset class. And then your why ideally their why as well. Like it's, it's really good at becoming passive. You know, I can buy between 30 and 100 units and anywhere in there is no man's land. And it also allows us to really be more passive than these smaller deals. And, and so anyway we're really excited about it and pressing to close by close day. What does the rest of your week look like for a short zoom. But typically like I would Say, do this if you have a deal. Otherwise just let them know, hey, I'm interested in a phone call. Because what's really important is that you create, you know what their buy box is as well. Because it's okay for you to have a buy box, but you also need to know what are your potential investors buy box, what are they looking for? And then so you're not like wasting their time, but you're also coming in clutch if you have a deal. That's exactly line with them. You're able to literally just share the, the things that they want. Okay, and then last step, guys, you're going to send out these messages, this script to a hundred people. Okay? I want you to think through anyone with influence, people who have been successful, people in or retired from related jobs like accounting, real estate, lenders, and then people with stable jobs. People may have come upon an inheritance. You'd be surprised. Guys, as far as people who have received an inheritance, you may know someone who is potentially in that kind of situation. But I would literally say you need to reach out to more people than you think or people that you're not sure has capital. Just go on the, on the saying yes and and messaging them or people who run successful organizations. So yeah, that's the four steps. Again, the first thing I'm going to recommend now, reaching out is hot. That's a cold prospect. Is a whole nother video I hope to make for you very soon. But typically, you know, that looks like ads to a landing page. Collect their email to a webinar where you could do like a scheduled live webinar to talk about a specific deal or talk about your buy box, talk about your investing strategy and just start building relationships. Okay? Again, I'm not an SEC attorney. We have SEC attorneys in our mastermind to help keep things regulated and keep things on track. But you definitely want to make sure you're following those guidelines. So it gets a little sticky when you start talking about ads and stuff. You got to make sure that it's SEC approved. Right. Outside of that, guys, this is going to be your best first step. If you're just getting into the game, even to moderately, you know, experienced, then do this. I promise you, you're going to see results. I look forward to hearing how it went for you. All right, God bless you.