Cost of entry into where all the fish are!

[richardkp]

Another investor and I got talking after thanksgiving about how to go where all your potential JV partners (the "fish") are. Both he and I are frustrated with the length of time it is taking to get some "bites" on the hook.



The conversation got round to where all the fish are and where they hang out. We know that yacht clubs, golf clubs, car clubs etc. are definitely where there is some serious money. But the issue is that it takes some serious money to get in them!

I certainly don't want to buy a yacht, play golf (sorry just not my sport!) and race cars!



So my question is how do you get into these places where there is $$ without "faking it 'til you make it" or spending some serious dollars just to get into the places?



Or are there other places where the fish are as well? I have just named the places I know where the money is.

 

[Hutchym]

Richard,



I have thought about the exact same thing for a couple years. I realized something a few weeks ago, however. We had a community bbq and I had told my next door neighbor I was looking for a partner to invest with and needed the cash. Over the last few months we had spoken about investments a few times and During the lunch he introduced me to a neighbor in his 50's. He had just retired and didn't know what to do with his money. He wanted "fair" growth, with very little risk. He hates the idea of stocks, especially now that he's retired. He also didn't like the thought of 2% return in a high rate savings account. What he did have was a extremely large sum of cash sitting around. I would have never known as he lives in a 900 square foot bungalow and drives a honda civic. I think the point to my storey is possibly the people that dont spend the cash and want a comfortable retirement have the most. Take care,



Mike

 

[wgraham]

Richard this is an area that many investors have trouble with.



The big problem with going to the obvious fishing holes is that they are often fished out!! Lots of competition and high cost of entry!



Don't be afraid to think more about your areas of influence. My first few joint venture partners were Mountain Guides!!! Yup that is right...old crusty, dope smoking ski guides! Don't discount anyone. Have the conversation with as many people as you can. You will know right away if they are receptive or not. If they are follow up...if not the weather is always a good topic!!



Building a funnel of cash takes time!! Some investors take years to close!! The more people you are talking with the better!



I follow you on FB and Twitter and you guys are starting to do some good things in that medium. I know you get the ideas and concepts. Give it time to mature and soon you will be attracting the people you are looking for INSTEAD of hunting for them!! A very empowering position!

 

[TodorYordanov]

In the 1950 a new immigrant to the country opened a car dealership with the little money he had brought with him.

One day a girl fundraising money for a new-to-be-build hospital walks in the dealership and asks if he would consider donating. He asks "How much" and she answers " As much as you can afford, sir".

Being a new immigrant with pride, but very little command of the English language or connections to "Canadians" he thinks for a moment - "What would they think of me if I donate too little".

He writes a cheque for $2000. It takes him 2 years to pay the bank that amount back - he had the money borrowed.

The newly formed hospital board meets to discuss and celebrate a very successful fundraising campaign and one thing pops up. The biggest donation from many, many donations is $500... except a donation from an individual that no one has heard about. The members of the board are bankers, judges, lawyers and doctors. They all are dying to know who is that most wealthy, giving and successful individual in their community. They go to thank him for his most generous donation and find a simple man who is hard working, optimistic and just happy to he here. He is also humbled that he was asked to donate.

The next morning one of the board member, a judge, asks the local justice department to consider buying all their vehicles form that man. The other board members do the same.

The rest is history.

Ignat Kaneff originally from Bulgaria is one of the wealthiest Canadians, proud recipient of the Order of Ontario with charitable donations in the many millions. He is no longer in the cars business, but real estate, developments and golf courses.



How do you get noticed and earn the respect of "big fish" I think is the question. How do you get noticed for the right reasons, by the right people?

I think there are unique opportunities that each one of us can create by giving.



I am far from a JV "Authority", but I have a lot of fun negotiating how a 2,000 or 50,000 donation can go the furthest and bring the most value to the recipient. And I know that people are noticing and appreciating.

It is the "attraction" that Wade is talking about. It is instant recognition and a good thing. Win/Win





As I write this, I am in a $850 per night Muskoka Exclusive Resort chalet that I was the successful bidder at a Charitable Golf Tournament. The guy that owns the chalet donated it as a prize, he is a President of a real estate business. I've never met him and do no know anything about him. I just bid on his donation.

Do you think that he is successful? Do you think his business is successful? if you were to meet him tomorrow and he mentioned about some big and exiting opportunity that he has would you be interested to hear about it?



Richard, I also follow you on Facebook and I think that you are a person with integrity.

This long post was just some food for thought.

 

[richardkp]

Thanks Wade for the "follows" and kind words about what we are doing
over in the East. We always enjoy reading your information and certainly
look to you as someone we want to be similar to.

I guess I should re-visit the sphere of influence and get somewhat strategic and make a better plan!!

 

[richardkp]

Very, very thought provoking Todor and thanks for the comments. Hoping to come over to ON next year and bug you about your accounts again

Working on charitable donations from our REI group in Halifax as well - interesting that you bring it up as we feel strongly about giving back and now is the right time.

 

[richardkp]

Thanks for all the replies from everyone. In my heart I know that I am progressing - it's just taking time. We concentrate hard on being educators and motivators for everyone over here in the Maritimes but it is hard to stay motivated yourself when the progress is slow.

 

[RedlineBrett]

Well monied people are used to being sold to. Most are also used to evaluating investments and the trust factor is paramount.



You won't get anywhere coming in cold to a group like this. Raising money is tough enough if the potential investor doesn't really know you.



How do you think you'd look if you went into a country club pitching real estate investments to strangers?



You need to keep working your existing network. You likely already know the person who will fund your next deal.

 

[EdRenkema]

[quote user=wgraham]My first few joint venture partners were Mountain Guides!!! Yup that is right...old crusty, dope smoking ski guides!
I guess the lesson here is to go back country skiing and all the other things will fall in place.



Seriously just b/c people have money - cash in large sums (over $100K) doesn't mean they are potential investors. I have a friend who has somewhere in the neighbourhood of $400K - in cash in the bank, has no debts, owns his house & his car, earns in the area of $80K per yr. He will never invest in RE or anything else for that matter. He is addicted to cash, thats right, a fiat currency that devalues daily and is exposed to taxes & inflation. Wade makes a good point, however Mountain Guides are hardly mainstream, working class nor upper class people. Guides are a breed apart and are used to trusting their buddies with something a lot more valuable than their money - their lives. Plus investing in RE takes cajones I think Guides have that in spades. The one thing very similar to guiding & RE investing is the fact that it appears risky while not so much in reality providing the correct safe guards are in place. I bet thats why Wade had some success in that genre...

 

[Rickson9]

[quote user=Hutchym]What he did have was a extremely large sum of cash sitting around. I would have never known as he lives in a 900 square foot bungalow and drives a honda civic. I think the point to my storey is possibly the people that dont spend the cash and want a comfortable retirement have the most.





I like this. +1



You've just described all my wealthy friends. My wife and I are in our 30s and even though we have a lot of money, this is an exact description of how we appear on the outside.



In a sense, the game of money is like poker - the guy making a show of splashing around in the pot usually has the weakest hand.

 

[wgraham]

[quote user=EdRenkema]Mountain Guides are hardly mainstream, working class nor upper class people. Guides are a breed apart and are used to trusting their buddies with something a lot more valuable than their money - their lives. Plus investing in RE takes cajones I think Guides have that in spades. The one thing very similar to guiding & RE investing is the fact that it appears risky while not so much in reality providing the correct safe guards are in place.


Wow Ed! You nailed this bang on!! Guides are used to taking calculated risks with people they trust and like which is why I have success with them!



I would have never sat down and thought of this as a lucrative market but it turned out to be. Once I recognized it it became very profitable for me!



Again, don't be afraid to really work that inner circle before you start hanging out at the country clubs

 

[housingrental]

There are some good posts above.

To add what has not been touched on.

A good chunk of people I see doing JV's and trying to find money partners for JV's should not be.

They do not know what they are doing.

I'd recommend dedicating your time to knowing your business - being a local sub market expert - and less time worrying about finding someone to fund you. You'll find people offering to fund you if you truly can add value to an arrangement.

 

[bizaro86]

[quote user=housingrental]There are some good posts above.

To add what has not been touched on.

A good chunk of people I see doing JV's and trying to find money partners for JV's should not be.

They do not know what they are doing.

I'd recommend dedicating your time to knowing your business - being a local sub market expert - and less time worrying about finding someone to fund you. You'll find people offering to fund you if you truly can add value to an arrangement.



This is one of the best posts I've read on here in some time. Everything said here is absolutely true.

 

[Rickson9]

[quote user=housingrental]There are some good posts above.

To add what has not been touched on.

A good chunk of people I see doing JV's and trying to find money partners for JV's should not be.

They do not know what they are doing.

I'd recommend dedicating your time to knowing your business - being a local sub market expert - and less time worrying about finding someone to fund you. You'll find people offering to fund you if you truly can add value to an arrangement.


+1

 

[richardkp]

[quote user=housingrental]

I'd recommend dedicating your time to knowing your business - being a local sub market expert - and less time worrying about finding someone to fund you. You'll find people offering to fund you if you truly can add value to an arrangement.









Hi Adam,

It's always good when the "big guys" weigh in on the posts

Spent a whole day yesterday at the Chamber of Commerce B2B Expo here in Halifax and did exactly what has been mentioned by everyone above. Stopped looking for money and just explained to everyone what we do, how we do it and our track record for the last 3 years since we started - all with our own $$'s. It peaked a lot of interest - especially now with the recent shipbuilding contract we just won (read more).

We have become the trusted authority in the Martimes and in the Canadian Real Estate magazine 4 times (soon to be 5!) so we build up that reputation.

I know that it is just a matter of time but sometimes I want it to happen quicker!

We are geo-graphic specialists in our markets and always look to make the partner win - we will then succeed as a result.



It's all going in the right direction but took lots of groundwork!

 

[housingrental]

Thank you Rickson9 and Bizzaro86

 

[housingrental]

Thank you for the kind thoughts Richard

Good luck



[quote user=richardkp][quote user=housingrental]

I'd recommend dedicating your time to knowing your business - being a local sub market expert - and less time worrying about finding someone to fund you. You'll find people offering to fund you if you truly can add value to an arrangement.









Hi Adam,

It's always good when the "big guys" weigh in on the posts

Spent a whole day yesterday at the Chamber of Commerce B2B Expo here in Halifax and did exactly what has been mentioned by everyone above. Stopped looking for money and just explained to everyone what we do, how we do it and our track record for the last 3 years since we started - all with our own $$'s. It peaked a lot of interest - especially now with the recent shipbuilding contract we just won (read more).

We have become the trusted authority in the Martimes and in the Canadian Real Estate magazine 4 times (soon to be 5!) so we build up that reputation.

I know that it is just a matter of time but sometimes I want it to happen quicker!

We are geo-graphic specialists in our markets and always look to make the partner win - we will then succeed as a result.



It's all going in the right direction but took lots of groundwork!

 

[Thomas Beyer]

Always be ready to sell. You need a wide network. Some people like you, but not the deal. Some folks love the deal, but are weird to deal with. Some folks would invest $50,000 but not more. Others would invest the required downpayment but not co-sign a mortgage. Some folks would invest in principle, but now now, but in summer 2012.



You need a wide network and be ready to confidently tell your story. people that are interested will keep askign questions. Others just go onto other topics such as football.



Build a list. Re-contact them again and again, say once/month with news about a deal or general useful information.



Expect a ratio of perhaps 10 to 1 on average. Some guys are real good and need only 3:1. So, to get 4 guys to put up $100,000 you need to speak with 40 people. All very doable by yourself. It gets easier after you have done a few.