3 Mistakes That Scare off Investors
You know that if investors don’t trust you, they won’t invest with you, right?
And if brokers don’t believe that you’re able to close, they’re not going to send you deals. So how can you get investors and brokers to trust you and take you seriously? Well, if you’ve ever invested passively, maybe you realize that there are a lot of little things that impact whether you trust the person that you’re considering investing with.
Have you ever had a gut feeling about something or someone? Now you may not know why you feel that way, but a lot of times you’re right. Our brain picks up on all kinds of little signals and it puts them all together, processes them, and gives us a certain feeling about someone or something. Now, a potential investor has to decide whether they can trust you or not.
There are lots of little things that can send signals to them about whether you’re trustworthy or not. Like it or not, a lot of the interactions that you have with potential investors today, or brokers, will be done online. That’s just the world that we live in today.
So today we’re going to be talking about how technology can either help or hurt the way investors and brokers feel about you, whether they trust you or not.
We’ll talk about a lot of little things that you can do to send the signal to investors that you can be trusted. But first let’s look at three mistakes that syndicators often make that scare off both investors and brokers.
The first mistake is having a poor online reputation. You have to realize that investors and brokers are going to Google you. What will they find when they do? Well, if you’re not sure, Google yourself. Take a closer look at your social media accounts from the perspective of a potential investor who’s deciding whether they can trust you or not. And, of course, you want to clean up anything that would hurt the impression that a potential investor would have. Now I’m not saying that you want to hide who you are or pretend you’re someone that you’re not. You know, showing some personality is a good thing, but pictures of you drunk at a bar or breaking the law in some way is not going to inspire confidence. So just look at things through the eyes of investors and brokers and think about what impression that you’re giving.
A second mistake that syndicators often make is using a free email account, something like Gmail or Yahoo. The reason is it’s easy to hide behind a free email account. They’re disposable. If you were trying to scam someone, you’d probably set up a free email account because it’s not really tied to you personally and you can easily walk away from it. And probably most importantly, it just doesn’t look professional. It doesn’t look like you’re somebody who’s running a business. A free email account makes it look like you’re just getting started and that you probably don’t know what you’re doing. On the other hand, an email account that’s branded to your business, like, Mike@premierInvestments.com shows that you’ve invested something in your business and it looks more professional, which builds trust. It looks like you’re actually running a business. And the good news is: it’s pretty easy to set up email @ your company name or your domain name. You can get an email account, wherever you get your domain name, like GoDaddy or Namecheap.
But I personally prefer Google Workspace. It’s exactly like using Gmail, but it’s going to be @ your business name instead of @gmail.com. The last time I checked, it was about $6 a month per email address. Having a professional email address seems like a small thing, but the small things make a big difference in the impression that people have of you and your business.
A third mistake that people sometimes make is not having a website or having an unprofessional one. Having a professional email account like I said is a good start, but let’s say you get the domain name like premiereinvestments.com and you contact a broker and you ask them to put you on their mailing list – You give them your email address, like joe@premiereinvestments.com. Now, when you get off the phone, what do you think they’re going to do?
They’re probably going to go to premiereinvestments.com. The part of your email address to see what’s there.
Investors will do that too. They’ll also search on Google for your business name. It’s just part of them doing their homework to see if this is someone they want to work with or not. I know I’ve done this many times with people that I’ve met at live events. And I can’t tell you how many times there is no website there.
It’s just parked at GoDaddy page or something like that. So not having a website gives the impression that you’re not really a business, because businesses today have websites.
Another common mistake is that investors will just put up a do-it-yourself website using some kind of website builder tool like Wix or Weebly or Squarespace.
Often, a do-it-yourself website looks like a do-it-yourself website, and that undermines trust. It sends the signal that you can’t afford a professional website, which means that you’re just starting out and don’t have any experience. A while back, a multifamily investor posted on Facebook that they were looking to buy an apartment complex. Their little ad said, email me at this gmail address if you have a deal. Here’s what somebody’s reply was – I’ll just read it. It says: “I do have a concern. If your company is a real player, why do you not have a website or a branded email? I honestly question buyers who claim to be looking for million dollar deals using Gmail emails. Thanks.”
And that’s a valid point. If you’re telling people that you’re at a level where you can take down a large apartment deal, what would be the logical reason for you to be using a free email account or to not have a website? Both of those things say, I’m an amateur or I’m just starting out and haven’t invested any money in my business.
Now, in this case on Facebook, somebody called them out on it. They specifically said like, here’s my concern. Most people are not going to do that. They’re just not going to invest with you. Or if it’s a broker, they’re not going to send you any deals. You just won’t ever hear from them. But this just gives us some insight into what’s going on in people’s minds.
So here are a few stats to drive home the point about the difference that having a website can make.
First, 85 percent of U. S. consumers base business decisions on online research, and there might even be more now. I mean, I think most of us go to the internet first. 73 percent of people won’t deal with a company that has no website, and 90 percent will disengage from an amateur or unprofessional website.
So I think you’d agree those numbers are significant. But to me, what’s even more significant is the real life experiences of syndicators at one of the events we went to this year, someone I met said that he had been contacting brokers for many months to try to find deals and he wasn’t getting anything.
He was using a Yahoo email address. Again, a free email account. He had no website. He was asking brokers to add him to their list to be notified of deals and he got absolutely nothing for many months. He didn’t hear a peep from any of them, but then he set up a website and he set up a branded email, with his company name. Then brokers started sending him deals.
He said after months of no results, it was like flipping a switch. All of a sudden there were deals coming in. So what can we learn from this? Why was it like flipping a switch to set up a website and branded email? Well, clearly brokers were not taking him seriously before they saw a free email account and they thought this guy is just starting out. He’s going to waste my time. He won’t be able to close on a deal.
Likely, some of the brokers Googled his name or his company name to see if you look legit. And what would they have found?
Nothing, at least nothing that would have given the impression that this is someone they should take seriously.
Of course, other investors will do the same thing. I’ll briefly tell you another experience. One of our clients had not yet done their first deal. They were just starting out and they were meeting with a broker because they were interested in buying a property and the broker asked what experience they had. At that point they really had none. You can imagine how that’d be kind of a scary question at that point. It’s the question you don’t want to hear. But they said, let me direct you to our website for that information. The broker pulled up their website right there on the spot in their office.
So what happened? Well, I’ll let them tell you in their own words. Our customer said, our website gave us credibility that helped land our first deal. After the agent and seller saw our website, they were completely mind blown and were very excited to work with us. So, that’s an important point – His professional website was the difference between him getting access to that deal or not.
In this case, if he hadn’t had a website to send them to, very likely the meeting would have just ended right then.
But in this case, he ended up getting the deal.
The same kind of thing can happen with investors.
If you don’t have a professional online presence, you’re making it really hard for investors to trust you. So most of them are going to go somewhere else.
Even if you’re working on your first deal and you’re raising money from friends and family, don’t you think that they would feel more comfortable knowing that you were treating this like a business? If you have a professional website and branded email to show them, it can really help them feel more comfortable.
They can feel more like they’re investing in something real. So, a website can make a huge difference in how investors and brokers perceive you.