How do I raise capital from high net worth individuals for large multifamily deals? This is a question entrepreneurs ask themselves continuously. Most entrepreneurs want to jump right into a Game 7 (the deal) and end up failing to raise the capital needed. If you put in the prep work and are consistent with it, you will be able to raise massive amounts of capital when the next Game 7 is awarded to you.

I have applied these steps and in doing so was able to raise all my capital in less than 2 weeks for a deal we just closed for, $40M – 388 Units.

Step #1 – Build your Reputation

People like to invest with those who have a great reputation. They also like to see that your interest is aligned with theirs. If you want to raise capital but do not invest in multifamily yourself, how do you expect them to earn your trust? If you are new to the multifamily space, then talk about your previous success. Talk about obstacles you’ve encountered in your previous work field, how you overcame them, and how you succeeded.

For me, early on, I talked about my success playing professional hockey and the sales I produced at one of the largest printing companies in the world. I was able to capture 11M in sales in 3 short years through relationships, customer service and client trust.

Step #2 – Build your Brand

Create your logo and a website. Get on Facebook, Bigger Pockets, and LinkedIn. If people in your network don’t know what you’re up to how can they invest in your deals? Start simply sharing other people’s content that aligns with the deals you are doing.

Tell your story to friends and family. Let people know why you’re getting into multifamily. Share your knowledge on cash flow, appreciation, tax advantages, economies of scale, etc. Soon you and your brand will become the expert in your network.

Step #3 – Get Commitments

If you are not currently taking part in steps 1 & 2, I encourage you to start immediately. Here’s why. When you get a deal in the next few months your network has already been primed and knows you as the multifamily expert. You have shown them why you are credible and have their best interest in mind.

To get commitments put together a sample deal package. For those who have shown interest in what you’re doing send this package to them and follow up. Your follow up should end with something like this…

You: “If I find a deal like this are you interested in investing?”

Investor: “Yes.”

You: “Great! How much are you looking to invest?”

Investor: “$75-100k.”

Keep in touch with your potential investors as it can take several months before an opportunity comes. A great way to keep in contact is with a monthly newsletter.

By securing verbal commitments you then have a better idea on what size deal you can do. I strongly recommend being conservative and raising 30-45% more capital than actually needed.

Step #4 – Increase Your Network Through Referrals

Referrals to this date are one of the most effective ways to gain investors. When you are offering an opportunity to investors don’t be afraid to ask if they know of anyone that likes to invest in real estate. They are able to create a warm lead for you and create a sense of instant credibility. Depending on what type of offering you have created they may not be eligible for your current deal, but it is a great way to start the relationship and get them in on your next deal.

By doing these 4 steps you will be well on your way to raising massive amounts of capital. Additionally, here are some other ways that work very well once you have done a deal or two.

Become a member of/join:

-country clubs
-tennis clubs
-business mastermind groups
-charities
-foundations
-local real estate meetups
-real estate conferences

Raising capital in the beginning is no easy task. Following these steps will create a snowball effect of investors who want to be a part of your next multifamily deal.

What have you done to raise massive amounts of capital for multifamily deals?