How to decide with whom to invest in real estate - Part II
Entrepreneur of the Week Alon Gilmore # Post 5
Part B: For entrepreneurs (and investors) - how an investor chooses to run with him. + Marketing mistakes.
***
Well, I have to start this day with a disclaimer:
This post is not about formulas, concepts or exact science. I strive to give what I think is most interesting to you to know, probably in my personal experience in this whole business of real estate entrepreneurship.
Everything written in this post is written about my free mind, this is just my personal angle,
My sensitivities, my opinions, and what is not said should not be attributed to what has been said.
It's fine yes or no to agree with some or all of what will be written here.
appropriate?
***
Intended for beginning entrepreneurs, and for investors who are intrigued by the entrepreneurial world:
1. Go for sure: If you are an entrepreneur in the beginning, you will go through cinema.
You're about to enter another movie.
You remember John Lennon's quote from the first post, about plans and life.
Anyone who is used to certainty, looking for certainty, thinks that there is something certain, and that entrepreneurship is a calm river - a lot of preparatory work awaits him. Uncertainty - This is the only sure thing - certainly and certainly when you are an entrepreneur.
Make no mistake:
I also work in the method of goals and programs at the Senate level, and at the calendar week level.
Must have a goal and a plan, we all know that.
For years I have tried to be a fanatical student of time management, productivity and desperate attempts to stick to the task log accurately. But I'm not a fanatic for that anymore.
You must take into account the flexibility margin. You will constantly have to respond to changing events around you.
Even a tougher plan than Putin will have to accept changes.
It's okay to actually update programs on the go, to navigate to the initial goal.
Lack of flexibility and functional creativity, may deviate from the focus of the doing itself, will narrow the scope of your managerial possibilities, all because of an unrealistic aspiration to achieve complete control over the future.
Only when you start to get used to it, and feel comfortable with uncertainty, only then can you function as a true entrepreneur.
2. Listen! (ZA read): You are going to manage money of other families!
Wow!
Do you understand what that means ??
Another person, entrusts you with the money of his house and tells you: "I trust you and believe in you."
זה מדהים!
Being responsible for managing others' money takes another person out of you.
Be worthy of it. how? simple.
Remember that you too have a family and children. Be transparent, and stick to the truth. It's easy, I promise you. No need to round corners, no need to twist convincingly,
Be real, and Strait forward it saves so much toxic energy, pleasure.
Do not be like that for others.
Be such towards yourself, and you will see how it will roll naturally for everyone as well.
(Of course beyond the level of perfect professionalism required of you, it goes without saying).
3. Control the deal and decide quickly. Things will go wrong for you. And when you solve them, guess what? Will go wrong again.
And when you solve them again? Something will go wrong in another arena.
You must have a quick and sharp decision-making ability, because then in every disruption you see a door open for new wonderful solutions and opportunities that you have not thought of before.
4. Be humble, all the time. Not for investors — but for yourself.
For your success.
Do not assume that you know everything all the time, you will find that entrepreneurs do not always make sufficiently conservative assumptions, like the researcher who unknowingly does - he influences his research only by the very fact that he is the researcher.
No matter how big you think you are, or your big deal, the market will always be bigger and stronger than both of you.
Especially in recruitment talks with investors - be humble.
5. Conservatism in business plans: I have yet to see the deal that ended exactly with Excel and its marketing presentation.
And I've seen thousands of business plans in the last 10 years, trust me.
And when something does not make sense in Excel, it makes me think like a Purim rattle, but I'm talking about sampled programs.
Remember: At the end of the project, you will need to look the white in the eyes of your investors.
You want to get there smiling! Trust me
And the bonus is that it will be much easier for you to raise them for future investments, with less marketing costs.
Be careful to be very conservative, and stick to the realistic truth. This entrepreneur-investor game, it's a game of coordinating expectations. There is no need to stretch the return to the limit of the asset potential at the expense of adding risk.
You do not always have to leverage every transaction to the end for example.
An investor who expects an illogical return will turn it over to competitors. Or to Vegas, where at least he will enjoy.
6. It is possible to get rich from buying and owning investment assets, and this is what entrepreneurs strive for. But it requires sacrifice.
To be an entrepreneur, to know how to locate such transactions, small and large, to conduct months of negotiations, to initiate moves, to finance (receive American funding), to maintain, to manage, to improve, to talk to the crews day, night, to go down to basements from inhuman levels. To test potential, be prepared for anomalies in renovation plans, understand that Corona has started and it is impossible to get into assets, and investors cancel recruitment, and still keep moving forward. Agree to the price and sacrifice and in advance, and in coordination with your spouse and family.
And here are some of the skills you will need to grow: Property Finder, Purchasing Manager, Finance Manager, Job Manager, Marketing Manager, Sales and Recruitment Manager, Legal Department Manager, Back Office Manager, Accountant, Operations Manager, Content Manager, Property Manager, Renovation Manager, Manager Business development… and I have not even started to warm up yet.
It takes time. And a lot.
Even if there are people who will do all of these for you- you still have to know all of these areas professionally.
Build it right, be transparent and honest with yourself about every deal and about every conduct, and then you will have a really easy time doing it with investors. Not that it sounds good. Not just because you have to. But that will translate into profit. Economic, yes.
8. You must have seen that about a month ago, an Israeli couple who flew from New York to Israel, decided that he was allowed to settle in the business class only because there was a vacancy there, and refused to return to the economy class according to the ticket they paid for. The plane made a round trip back to the US where they were dropped off and stopped.
"Pride."
The customer is not always right! Ever since I was a kid, I have not understood this strange statement that the customer is always right. And as a salesman I was never convinced of her righteousness, ever. Certainly not if you have an amazing product.
There are 2 parties to the transaction, otherwise the customer would not be willing to pay for the opposite value.
So why is one side right by default? And why always ??? It is not clear. But hey, I wrote at the beginning, it's just my subjective opinion.
It is not mandatory to accept every investor! Yes, a little illogical advice, (but it makes the most sense) you can say goodbye to unsuitable investors, and nice one hour earlier. They will do you damage in your business.
Yes, that's right, it's hard to give up recruitment, but only in the beginning. Import another suitable investor in its place.
If an investor intends to interfere with me in management, if he devours energy beyond reasonable, if he is negative in his mind, if he comes on the frequency of "everyone is cheating, everyone is lying to me", if he does not fit the nature of the investor group, if he bothers him. Than what comes out of it, if it could be a kind of energy poison to the rest of the investor group - say "bye" to him!
Happily I may have come across one or two of these in our company, but I happily referred them to competitors, who will spend.
Another rule that is really my personal is not a universal law, really not: investing in small amounts - I no longer accept. We start at $ 100,000 and I still think it's too low a minimum. (It also depends on the deal).
11. Marketing: 90% of advertisers and content have a recurring motif. Without hurting anyone: Most of us entrepreneurs who offer a deal, look and sound exactly the same in messages. The same pitch is repeated - and I was guilty of it too. It's easy to go there.
But here's your chance, be different. Not hard to stand out. how? Be authentic. be yourself. With zero effort.
There is no need to register that $ 50 goes to economic freedom,
And you do not have to speak ill of others to emphasize that you are righteous.
And if you're working with an American sponsor, say it, it's just fine.
If you have a clear advantage, such as the fact that you are the entrepreneur of the field and not a marketing company - yes you will highlight it, because it is for the benefit of the investor for real.
Investors are also consumers. Marketing exhausted, detect bullshit very quickly. In our field the Know-Like-Trust marketing works even stronger in relation to other fields.
Investors do not enter into transactions without knowing and loving you.
Be authentic, even in sales meetings, you are an amazing entrepreneur. Why not be you?
Of course, I have more golden tips for marketing, but you didn't think that I would really reveal everything here, did you?
12. Raising: Do not sell through (expected) returns. We in life do not sell through returns, do not have to.
We have a way, and a vision, to reach the economic freedom that everyone wants, and the next deal is part of the way. Do not stretch the deal to unrealistic returns, and do not add risk to add another percentage to the return. Does not pay.
A. The types of investors you do not want will come to you.
B. You are a real estate developer in the USA. In any case, the returns you will achieve will probably be double and more than what can be achieved in the country. Rental income, leverage and together with capital gains it is possible to achieve very nice double-digit returns per year even without taking unnecessary risks.
We are in 2022, do not think that your investor will enter into an investment with you because you have recorded a distant expected return.
13. Almost last: Being an entrepreneur is not an occupation. This is the essence.
And if you're a more experienced entrepreneur, you've been an entrepreneur who went through an email - you probably know what I'm talking about.
There is a price to pay for being a real estate developer in the US.
I personally, I agreed to pay it.
----
14. And lastly: if you want to be a US real estate entrepreneur, working with affiliate investors, you must internalize this:
The deal is not the property. And I say this again:
The deal is not the property.
The deal is you.
Remember this.
***
In the photo: Shay and I are considering buying and improving a baseball stadium.
Responses