J Darrin Gross Podcasts

Dave Dubeau  0:00  

The whole networking and schmoozing and turning every conversation into a, into a real estate conversation then following up following up following up, again dealing with massive rejection, most what I call mom and pop real estate entrepreneurs are geared up that way. I mean, they’re doing real estate, they’ve got some, some properties in their portfolio, there’s still, you know, a lot of them are still working at their jobs. A lot of them are doing this part time they got families, you got stuff going on. They don’t have the time or the energy or the inclination to develop this whole skill set of becoming a, you know, a high pressure closer kind of a person. So we offer kind of a different way about going around. raising capital is that say chasing after investors, let’s figure out a way to attract them to us. 

Announcer  0:47  

Welcome to see our EP n radio for influential commercial real estate professionals who work with investors, buyers and sellers of commercial real estate coast to coast whether you’re an investor, broker, lender, property manager, attorney or accountant We are here to learn from the experts. 

J Darrin Gross  1:06  

Welcome to commercial real estate pro networks, CR e pn radio. Thanks for joining us. My name is J. Darrin Gross. This is a podcast focused on commercial real estate investment, and risk management strategies. Weekly we have conversations with commercial real estate investors and professionals who provide their experience and insight to help you grow your real estate portfolio. 

Today, my guest is Dave Beau Dave is a real estate entrepreneur, best selling author, speaker and investor attraction expert based in beautiful British Columbia, Canada. And in just a minute, we’re going to speak with Dave about how to find investors and raise capital without rejection. But first a quick reminder, if you like our show, CR e pn radio, there are a couple things you can do to help. You can like, share and subscribe. And as always, we would love to hear from you if you leave a comment. Also, if you’d like to see how handsome our guests are, be sure to check out our YouTube channel. You can find us on youtube had commercial real estate pro network. And while you’re there, please subscribe. 

With that I want to welcome my guest, Dave, welcome to CR e pn radio. Well, thanks very much for having me. 

Dave Dubeau  2:27  

Darrin, this is great. Now I’m jealous because you’ve got like the perfect radio voice my friend, my goodness.  Well, as I’m going Geez, I wish I sounded like this guy. You’ve got like the perfect announcer voice. 

J Darrin Gross  2:44  

While I appreciate that, but the reason we’re doing this is to learn about real estate, and all the good stuff that from the good guests we have like yourself. And before we get going here, if you could take just a second and show listeners a little bit about your background.

Dave Dubeau  3:05  

Perfect. Yeah, Darrin. So as you heard, I’m from beautiful British Columbia, Canada. So just a little bit north of where you are there in Oregon and then doing the whole real estate thing for quite some time. kind of grew up in a real estate family. My father, my grandfather built a six Plex up as a family home. As I was growing up. My mother was a very active real estate entrepreneur. As I was a young young man and into my teens, she built up a portfolio of over 50 doors have always seemed like we had real estate going on in the family, but I didn’t pay that much attention to it. And then after graduating from university, way back in 1991, traveled the world ended up living in San Jose, Costa Rica started a business down there, lived overseas for almost 14 years, got married, had kids, when they got to school age decided to bring them back to North America. So they’d have a better education and had to start all over again from scratch. So I was in a brand new city had been gone too long. I didn’t have bad credit. I had zero credit. I had been self employed so long as pretty much unemployable. And there i’d figured out okay, what am I going to do to make a living so, Darrin, I don’t know if you remember those late night infomercials that used to come rolled out across the TV, but one o’clock in the morning? Remember those?

J Darrin Gross  4:25  

Oh, yeah, Carlton Sheets.

Dave Dubeau  4:27  

Yeah, yeah. So I saw one from a gentleman named Ron Legrand, one of Carlson’s cohorts. He said hey, you can get into real estate with little or no money down and I said hey, that’s perfect because that’s what I got. So I sent away for the course got it, dusted it off, got it dialed dove and Dolly I think was VHS cassettes and and you know, binders and all this kind of stuff. You gotta remember I was up here in in British Columbia. All of this stuff was American focus to kind of Canadian eyes it make it work in my market. I did that did 18 deals in 18 months. And then after doing that, because of my background in marketing and, and that sort of thing, I caught the eye of an up and coming real estate guru up here, when I’m bored is the director of marketing for him and his company’s helped him grow from two employees to 128 employees, seven branch offices owe $200 million a year in revenues between, you know, training products and investment stuff that they’re offering as well. And took some time off from real active real estate investing got back into it doing rental home, eventually got out of that. And more recently, since 2013, I focused on partnering up with smart folks who are good at multifamily investing, and getting part of that by helping to raise capital for their deals.

J Darrin Gross  5:44  

Got it. So you’ve been on all ends of the spectrum of real estate from I guess hearing it in the family where you’re growing up to the no money down to working for larger entered entity and and now you’re, you’re raising capital.

Dave Dubeau  6:01  

Exactly, exactly.

J Darrin Gross  6:04  

Well, sounds like you, you’re qualified to talk about raising capital, that’s, that’s good.

Dave Dubeau  6:08  

Well, I’ve done some myself, that’s for sure. But more importantly, I’ve helped a lot of other people raise cumulatively hundreds and hundreds of millions of dollars for their deals. So yeah, the process I’ve come up with has been quite effective. And it’s really effective. For people who are just getting started with raising capital, they haven’t done it before, or they haven’t done it very effectively. And they don’t like the idea of doing the old school dialing for dollars, you know, which involves massive rejection, or the whole networking and schmoozing and turning every conversation into a into a real estate conversation, then following up following up following up, again, dealing with massive rejection. Most what I call mom and pop real estate entrepreneurs are geared up that way. I mean, they’re doing real estate, they’ve got some, some properties in their portfolio, they’re still, you know, a lot of them are still working at their jobs, a lot of them are doing this part time they got families, you got stuff going on, they don’t have the time, the energy or the inclination to develop this whole skill set of becoming a, you know, a high pressure closer kind of a person. So we offer kind of a different way about going around raising capital and instead say chasing after investors, let’s figure out a way to attract them to us. So that’s what the whole idea is.

J Darrin Gross  7:28  

Let me ask you, because, you know, the the your starting point there with the no money down kind of a property, obviously, you know, that’s the no capital. But the reality is in the larger properties, if you want to really grow your portfolio and get into larger properties, there’s a need for capital. So I’m kind of curious, uh, you know, I was just thinking as you’re, as you’re talking that the strategy from, from a No money down a strategy, a starting point, I’m wondering if there’s not some similarities and that you are still, there is still something you’re looking for, you know, in that potential for that deal to work, somebody’s got to have some money to make that work. Whereas now when you’re raising capital, if there’s a is there, is there a thread that a common thread through there, or am I yeah, I

Dave Dubeau  8:24  

mean, at least for myself, during when I was doing the creative, no money down deals. It was all about marketing, to attract motivated sellers, people that were in some sort of a walkie situation with their property, and they needed to get out of that situation, they weren’t looking for top dollar for their property, they’re looking for a solution. So that it all revolved around marketing, because those 18 deals that I did in 18 months, and there’s a pretty small market I’m in it was all by doing marketing and attracting these people. To me, I never used a realtor, I never searched the MLS, I never cold called a single fizbo. seller, it was all by applying marketing and getting these people to come to me. So fast forward, whatever was 10 years or more, yeah, probably more. When I started raising capital, you know, after floundering around and failing miserably and getting you putting up with a ton of rejection. I said, Hey, why don’t I apply what I already know about marketing, to raising capital, and let’s, let’s attract investors instead of chasing after them. So not quite, very different process. Same idea, though,

J Darrin Gross  9:31  

when I also guess another distinguishable difference that I’m heard something I’m hearing you say is that notion of when somebody is reaching out to you, as opposed to you you approaching them. I’m wondering if there’s if you can speak to that as far as the

Dave Dubeau  9:49  

the Well, I’m sure Dan, in your background as an insurance professional, you know, the difference firsthand between chase After a prospective client and having a client be referred to you, by a current client, you know, it’s it’s night and day like, you don’t have to convince that second person, how great you are you, somebody else has already done that or something else has already done that. So same idea here. I mean, a lot of us when we first get into raising capital or think about raising capital, what comes to mind is The Wolf of Wall Street, right, that movie or back in the day Glengarry Glen Ross right? Always be closing, right? Alec Baldwin great movies. But that scares the crap out of most people, the idea of having to pick this sucker up and call everybody you know, and try to pitch them on a deal over the phone. You know, especially when you’re trying to rate you know, your, your listeners are trying to raise hundreds of 1000s of dollars, if not millions of dollars, for multifamily properties, right. So that’s a daunting task, especially if you’ve never done it before. And even if you’re good at it, you’re gonna face a ton of rejection. So most people, myself included, and this is how I learned this the hard way, there is another big concept you guys, you want to write stuff down. When it comes to the chicken or the egg, which comes first the money or the deal, a lot of people think you know, find a good deal, and the money will find you. We’ve all heard that. And Excuse me, but I say that’s complete Bs, that that is Bs, what you want to do is you want to have the capital and your investors lined up first, and then go finding the deals. Because then you can go in, you can negotiate, you know, you’ve got the capital bond to back you up. And you can go in and you can make offers with confidence, knowing that you’re going to be able to close versus if you go and tie up a deal and then you scramble around to raise capital if you haven’t, if you haven’t laid the foundation down. That’s a very, very difficult task. So I remember vividly during my, my whole experience, they got me to focus on this was when I was doing ranch home deals. We’re doing a strategy called tenant first. So we’d actually go find a really good rental client, we go buy them a house, and then we rent owner to them for two to three years while we help them get qualified for financing. So that’s great. And the first I did the first couple of deals under my own steam, I had enough capital I had enough Home Equity I could come up with down payments but then I ran out and of course that’s when the perfect tenant buyer couple landed on my lap. They were absolutely ideal ran out got a property tied up because I’d heard Hey, find a good deal that the money will find you crunched all the numbers figured everything out. saw them I was gonna get my investors really good return. And then I said okay, well I still have to do something right the money’s not gonna magically find me I need to do something around this. So I I heard pick up the phone and start dialing for dollars. So I tried that. Rejection rejection rejection, rejection rejection. Now I admit, I don’t think I was very good at it. But even so it’s it’s a tough, tough road. I my fragile little ego could only handle so much of that before I said, Okay, enough’s enough. I quit. And then I thought, Okay, well, I also heard turn every conversation into a real estate conversation, go out there network schmooze. You know, talk a storm, collect cards, give cards follow up all that stuff. So I tried that local Chamber of Commerce, BMI groups, Toastmasters, wherever, whoever had a group of people together and would let me in the door. That’s what I went. And I talked up a storm use my little elevator pitch about real estate and all this stuff, collected a bunch of cars and cards and stuff and raised zero capital. And I was under a crunch, right? Like I, I had to raise this money. Within two weeks, I got an extension. And then I came up with what I thought was a brilliant idea. And you’re going to scoff at this term. But here’s, you know, desperation. He’s desperate action. So I thought, Hey, this is such a good deal. It’s going to sell itself. It just enough people see it. So I put together little little years ago, put together a little PDF, and email that to a couple 100 people that I knew, that’s how Okay, this is this is gonna work like gangbusters. And this was the first thing I saw any action on there. And I started getting some replies back I thought, Oh, good. I was counting the money already, right? until I started reading these replies. And basically you’re saying date, buddy, I haven’t heard from you in five years or some cases 10 years in one case. 18 years the person hadn’t heard from me. And here you are hitting me up for cash free deal. Take a hike.

Dave Dubeau  14:23  

So the story ended badly Darrin, I had to collapse that deal. I’m in a I’m in a relatively small city. There’s about 80,000 people in town. So I got I ticked off my tenant buyer big time ticked off the seller ticked off the realtor, the mortgage broker, everybody that was involved in this deal, got major egg on my face, in a fairly small market. And that’s why I said there’s got to be a better way than this. And that’s why I get my head shaken as a dummy. If there’s something that you’re pretty good at it’s marketing so why don’t you figure out a way to uh, you know, attract investors get people get Get investors lined up ready to go in the wings. And then you can go make offers on deals. So took a bit of time and effort and trial and error, but I came up with this process.

J Darrin Gross  15:10  

So let’s talk about what was the? I mean, obviously, the AHA is you need people you need money. You need capital lined up here. Yeah. So let’s talk a little bit about that. What are, what is it that you do now? Or that you teach your prospective clients or your clients to do so that they are prepared with the capital when the opportunity presents itself that they can pull the trigger and make the deal?

Dave Dubeau  15:40  

Well, what I do Darrin is I, I encourage people to go after the low hanging fruit, encourage people to go after the low hanging fruit. So what does that mean? That means we need to kind of step back and look at things realistically, in order for somebody invest 5075 100, grand or more with us, they need to know us, they need to like us, and they need to trust us with their money. Would you agree that those those are good starting point? Yeah,

J Darrin Gross  16:07  

yeah,

Dave Dubeau  16:08  

you need if you’re missing any of those, it’s going to be very, very difficult. But most of us when we’re trying this, we think anybody with a pulse and a checkbook, that doesn’t bounce would make a good investor, that that’s very, very dangerous. First of all, from a practical standpoint, you know, if you’re trying to raise capital from complete strangers, that’s pushing a very big rock up a very steep hill, they don’t know you, they don’t like you. And they sure as hell don’t trust you with their undergrad. So you have to create that, that relationship from scratch. And that takes a long time. The other big thing to take into account is that, typically, it’s illegal, right? Unless you and I are licensed to do so. So typically, we’re thinking about a mortgage broker, a stock broker, could be a financial planner, these people can receive capital from the general public, because they’re licensed to do so. You and I, as mom and pop real estate entrepreneurs, we can’t, unless we got things structured properly, unless we’ve got the right exemptions. And caveat here, you guys, you know, I’m Canadian, from north of the border. So I’m just talking about what I’m aware of in the States, the rules are a little bit different. In Canada, we have we do have securities regulators same kind of idea, you guys for what I understand. You have state regulators, and then you got the securities exchange commission on top of that. So before you do anything, go talk to an appropriate real estate lawyer in your area that can get you set up properly, so that you’re, you’re compliant. That’s my, that’s my cover my butt thing there’s lamer. Yeah, but hopefully that worked. All right. So you guys, but basically, the big picture is, let’s focus on people that we have a pre existing relationship with right people who we know, and they know us, because here’s the beautiful thing there. We got two out of the three things taken care of they already know us. They already like us, now we just have to work on will they trust us with their money. So that’s what we suggest we, when you’re getting started with this, let’s come up with a target group of prospective investors. Now I say prospective investors, you don’t know who’s got the capital, who doesn’t have the capital, who’s going to be ready, willing and able and who isn’t. But for most of us is mom and pop real estate entrepreneurs. If you came up with a list of 150 to 200 people that you know, and they know you within that group, this is where I like to save my my training workshops. Everybody I firmly believe has at least a million dollars of capital sitting here, just waiting waiting to get access. The challenge is we don’t know exactly who has the capital and who doesn’t. So we need to come up with that target group of about 200 people. And then we need to let them know what we’re doing. We need to shake the tree and collect that low hanging fruit. So the first step is, let’s come up with that target group of people. And don’t don’t filter too much. Because one thing I’ve learned over the years during I’m sure you’ve seen this is don’t assume that somebody does or does not have money. because quite often the people that are all flash ain’t got no cash. And the people that are very humble and you know, don’t look like they have much money, actually do have a lot of money. So don’t prejudge people. Does that make sense?

J Darrin Gross  19:28  

Yep, no, absolutely.

Dave Dubeau  19:30  

Yeah, that’s a target group is the first thing. The second big part of this whole thing here is don’t make the stupid mistake I did, which is charging in like a bull in a china shop saying, hey, it’s Dave, I got a deal. If you got any cash. We’ve we’ve shown that that doesn’t work very well. So there’s a better way to do it. What I like to do is encourage people to do what we call a warm up campaign. So this is a way for you to break the ice with folks before you Start talking business. So we have a very simple three step email sequence that we send out to people we have our our clients send out to their prospective investors, just reconnecting with people on a personal level first, having a little bit of interaction back and forth. And then giving them the heads up there, we’re going to start marketing to them about what we’re up to with real estate investing. And just kind of set the stage before we actually start the marketing. Does that make sense?

J Darrin Gross  20:30  

No, so far, I’m on. I’m on on board here.

Dave Dubeau  20:33  

All right. Do you have any questions about this part of the process? This is step one of our five step process.

J Darrin Gross  20:40  

Now, I just think it makes a lot of sense on where you’re starting you you have, you know, eliminated those you don’t know and starting with those you do. And I’m guilty. You know, so often, it’s so easy to look past those we know, because we already know them. And we’ve already qualified them wrongly or rightly, without ever asking or even lead letting them know we’re doing this. And, you know, same same true. I know, in my insurance practice, it would be probably more more beneficial to start with those current clients, you know, and look for, for referrals, rather than keep charging and after new ones. But

Dave Dubeau  21:19  

yeah, well, we all will make that mistake, that’s for sure. But again, when it when it comes to just first getting started with with raising capital, I think this is a way to go. And a lot of people are freaked out. They say Wait, you know what, I’ve heard, don’t mix friendship or don’t mix family and business. That’s a recipe for disaster. And, and you’re right, it couldn’t be a recipe for disaster. If you do it the way most people mistakenly do it, they do it on a spit and a handshake. So here’s the recipe, here’s here’s a way to make it work. Bringing even if it’s your brother, your sister, your parent, whatever on board as investor partner, is what I always suggest, treat it as if you’re working with a complete stranger. What does that mean? That means if you were working with a stranger, which I don’t recommend, but if you were chances are, you’d be using the appropriate legal documentation, right. So do the same thing, even if it’s your brother, have the appropriate joint venture agreement, the appropriate contract, or the appropriate legal structure set up again, this is where it’s important to talk with your lawyer. So you know how to set everything up properly, make sure they get appropriate, independent legal advice, set everything up, set everything up. So when you are working on a deal, that you’ve got the appropriate reporting and the timeframes for all of that. So pretend as if your family member, your best friend from high school, or whatever, whoever it is that your investor, pretend they’re a complete stranger and treat it very, very professionally. And that will eliminate all, you know, set the parameters that will eliminate all of that back and forth that awkwardness, potential awkwardness of working with somebody that you really know. Now, here’s the other thing. People think, Well, you know, I don’t want to talk with my friends and family about what I’m up to with real estate investing. I think that’s the wrong idea. I think, you know, if you’re actively investing in real estate, chances are your thought process is or it should be that real estate is the absolute best investment choice for everyday people like you like myself, like our investors. I mean, what other investment class out there is such a solid, tangible investment, what other investment class out there, especially if your listeners are mostly focused on multifamily? You know, there are at least eight different profit centers that I’m aware of with a multifamily deal. What other investment choice out there offers that kind of potential for average people, so you are doing people a disservice by not letting them know what you’re up to with real estate investing. And then the other big mind shift is understanding the value that you bring to the table because a lot of us, when we first get started with raising capital, it’s, it’s all about me, me, me, me, me what I need this money to grow my portfolio I need this money to, to, you know, create more passive income for myself and my family. Well, that’s cool. But also think about what do you bring to the table for your investor partners, especially if you’re doing you know, a an equitable kind of profit split with your investors, you are bringing them an opportunity that they cannot or will not do on their own. So instead of kind of coming to the table, like a beggar with your, your hat in your hand looking for a handout, you can, you know, go to the table with some coneys with with a little bit of Mojo there, knowing that you are bringing massive value to the equation. So, you know, that’s a big challenge. I see a lot of new capital raisers making is they they kind of sniffle and grovel, they come across as needy. They’re kind of desperate. How do I know this? Because that’s how I was okay, needy and desperate and that just repels people. My mentor. once said, needy is creepy. Be very, very true. So needy is creepy goon just smell that. So you need to step into your position as a real estate professional, you need to understand what you bring to the table. And that is actually a much better thing than what your investors bring in, everything’s necessary, but you’re bringing more value to the table than the male, there’s trillions of dollars out there looking for a better home, you’re providing that better home for them. Again, that’s

J Darrin Gross  25:25  

a, that’s a, that’s a great, great point to remember. Because I think, you know, there are so many people that are resigned to what the stock market, how that works, or the little money that they’re getting on whatever they may be doing, as opposed to the opportunity. And I think a lot of this just comes down to a lack of knowledge, they just don’t know the opportunities exist? And who would they rather do? You know, an opportunity with somebody they don’t know, or you they do know, and already like and trust? So I think that’s, that’s a great, great point. And just keep in mind, I mean, I think really that that first, or that last point you made about just the value you are bringing, like you said they have money, and they’re looking for some sort of a return and a safe return it gets those are, those are great points. Great point.

Dave Dubeau  26:17  

Well, I think it’s our patriotic duty to educate people in our sphere of influence people who have that relationship with about what we’re up to with real estate investing, educate them, not manipulate them, not pressure them not, you know, arm wrestle them into investing with you, educate them about what you’re doing, and allow them to make their own educated decision as to whether investing with you Makes sense. So my whole process, my whole way of doing things is very, very, you know, no pressure, right. And it works very, very well is kind of counterintuitive to everything that we’ve seen on TV and in the media about, you know what, what it takes to raise capital, I don’t think you have to beat people over the head. To get them to invest with it, I think you need to provide that edgy education, allow them make up their own mind compare and contrast, when investing with you in a real estate deal looks like compared to keeping the money in the stock market and mutual funds when the bank. All right.

J Darrin Gross  27:18  

So, so let me ask you, can you describe a a typical student client of yours in their experience? They’re in real estate or wanting to raise capital? Can you describe some of the experience some of your, your clients have had

Dave Dubeau  27:38  

before they started this process, or once they start the process? 

J Darrin Gross  27:41  

Yeah, just the I guess more of like, once they start and how long it’s taken and, and the amount of money they’ve been able to raise and, and 

Dave Dubeau  27:50  

it’s all over the place there. And so it really depends on what kind of strategy they’re doing. So a lot of my clients come on board, and they’ve done maybe one or two deals under their own steam, maybe it’s a single family home, maybe it’s a single family home with a basement suite, and they want to do more of those, or they want to start stepping up into multifamily properties. That’s kind of that it seems to kind of work that way. So they start with single family homes, and then they start raising capital, they do a few more of them. And then they realize, Oh, you know, one, z, two Z’s are great. But if you can get eight doors in one property, or 16 doors, or 24, doors, or 54, or whatever it is, that’s a lot better. So it’s, it’s usually that kind of a progression. They’ve hit the wall, they sell finance, the first couple of deals, or maybe they they bumbled around and actually raised a little bit of money, but it was the old way it was painful for them. So they’re looking for, for better ways, and what are the results? You know what it’s all across the board. And we’ve had people get started just with this first step I was telling you about, which is coming out with that target group of prospective investors and breaking the ice and getting some people putting up their hand and saying, Hey, you know, Derek, I didn’t know you’re doing real estate, I’m interested. Tell me more. And then they have a meeting with them. And they show them what they’re doing. And they get investors right on board right from the right from the get go. I had one client not that long ago, Bruno was new to the country. He’d had. He’s from Mexico originally came to the country had some experience in Mexico, but none here and not even a big social network here. But went through the process. And his very first presentation, he got an investor on board for $200,000. Now, Is that normal? No, that’s not normal. That’s exceptional. But it does happen. I had another nother you know, typically it’s more like 80 to $100,000. I did have because the next step of the whole process is make sure that you’ve got your investor presentation put together I call this your your million dollar presentation, I usually recommend a slide deck. I had one, one client, I call it the million dollar investor presentation because typically over a period of months, you can probably quite easily raise a million dollars using this presentation. But one client of mine, Curtis, he did this process and he had his his very first presentation was with his dentist, and the dentist at the end of the whole thing he loved it loved what Curtis was doing love the presentation is Amen. So curious like, okay, so are you interested? He said, Yeah, I’d like I’d like to invest. And Gary said, Well, how much would you like to invest? When you said, you know, what, I’ve got a line of credit that I’m not using right now is for $1.3 million. Do you think we could do something with that? And Curtis scratched his head? And he said, Let me think about it for a sec. Yes, I do think we could do something with that. Bank. So that was, that was a biggest example of the fastest that I’ve seen. And that’s definitely not typical. But that’s, it’s definitely possible. So it’s all across the board, you know, from from $50,000, to $1.3 million, quite quickly, typically takes a bit longer than that to raise the big bucks. But you can start very, very quickly.

J Darrin Gross  30:58  

Knowing Hey, I think it’s all good. I know, you know, the, the notion, you go by yourself, eventually you will run out of capital. Well, and, you know, if you want to continue, you’ve either got a partner or I mean, you know, you’re gonna need more capital, and you have to sell something and try and, you know, move that around or partner up with somebody else. And I mean, I think that, you know, if you look at the largest deals, so the syndications and that, that they’re, they’re groups of people, they’re not just one guy. And even some of the largest investors I know. They get they get others to partner with them. And, and, you know, join capital in that. So

Dave Dubeau  31:47  

even the the biggest guys, pool capital, right? It’s, it’s the way it goes, I kind of use this analogy, I say real estate is our vehicle that we’ve chosen to get to where we want to be financially. So we’ve chosen real estate as the vehicle. And when it comes to every vehicle needs a driver, you’re the driver of your real estate vehicle, every vehicle needs fuel. And when it comes to our real estate vehicle, we can use our own finances, our own resources, that’s kind of like having a little jerrycan of gas, you put that in, and it gets you started. But sooner or later, you’re going to run a gas, you’re going to stall out, you’re going to get stuck, right? Now, when you’ve got access to other people’s money. When you’ve got a group of investors lined up ready to go in the wings, like I’m recommending here, that’s like having your very own gas station, you can pull up anytime you want 24 seven, and you’ve got the fuel that you need to keep your real estate vehicle going. So that’s the analogy I like to use. And again, it’s all about, you know, we talked about, find a good deal and the money will find you. That hasn’t been my case, unless you’ve done this. Now, here’s the ideal situation. You’ve got your investors lined up ready to go in the wings, then you go find a good deal. And then you say, Hey, guys, here’s what I’ve got. First come first serve. Right? You get first dibs on this, the people who put up their hands the first, get it first. And that’s the ideal situation to be in, instead of desperately creepily chasing after people in their mind.

J Darrin Gross  33:19  

No, no, it makes a lot of sense. And I think the other thing that I’ve seen in talking with other guests and just other investors is that once you raise that capital, when you return capital, the investors are typically looking if they’ve had a good experience for your next deal. Yeah. And I’ve seen the people be able to, you know, get into multiple properties based on those initial raises. Over time, there’s that’s, that’s all law, good

Dave Dubeau  33:49  

business, and referrals and all that kind of stuff. That’s actually step number five of my process. But yeah, it plays a huge, huge role, that’s for sure. So, so we’ve got our target group of prospective investors, we’ve broken the ice with them. We want to make sure we’ve got our investor presentation ready to go. And what I mean for that for most people what I found, the best thing is to have a, a slideshow, like a PowerPoint, or Keynote presentation, something you can show people, especially these days with old COVID thing going on, so that you can, you know, jump on zoom like we are and share your screen and walk people through a well structured, well organized, logical presentation that shows them what you’re up to. Right. And then the goal of the presentation isn’t again, somebody cut you a check for 100 grand necessarily. The goal of the presentation is to get them to say yes, when you’ve got a deal. I want first dibs, I want to be taken into consideration. That’s how we get our investors lined up ready to go and waste. And then this way, capital raising doesn’t need to be a sporadic thing. You don’t have to be waiting until you’ve got a deal to start raising capital. In fact, that’s the worst time you start raising capital now and then you go find the deals. Knowing that you’ve got the investors ready to go into wicks. So step number three of the process is called marketing, what I call constant, consistent communication, you want to be coming out on a regular basis, you know, rock bottom minimum, absolute minimum, once a month, you need to be communicating with your list of prospective investors. That’s the absolute minimum, you know, get up to the point where you can be communicating once a week, that would be pretty good. You can even do more often than that, but you know, shoot for at least once a week eventually. But start with once a month, find something that you at least don’t mind doing. Most people do not know I’m a real estate weirdo, and I’m a marketing weirdo. I like both. But most real estate entrepreneurs are not marketers by by choice. So pick something that you enjoy doing, whether that’s writing, if you want to do electronic newsletters, could be blog posts, could be video logs, blogs, short, three to five minute little videos, whatever it is, pick something and do it consistently. So that’s that and have it come out on a regular basis basis. And then the other thing about consistency is talk about focus on one thing. So most of your listeners, most of your viewers are into multifamily investing. So if you’re going to be talking about real estate, talk about the big benefits of multifamily or commercial real estate invest and talk about the big benefits of the market, or the markets that you focus on, talk about the profit centers that are available. But always keep in mind, this is important to always keep in mind that your prospective investors are probably not real estate enthusiasts like we are. Right, they are regular people. And the stats I’ve seen is 95% of the general population has never purchased a revenue property. So you always have to keep that in mind, the majority of your investors, or prospective investors are not real estate weirdos like us. And I say that with love and affection, you know what I mean? So keep the keep your marketing, pretty high level make it edutainment a little bit educational, and hopefully a little bit entertaining as well. What they want to know is that you know your stuff. So don’t overwhelm them with data, don’t overwhelm them with charts, don’t overwhelm them with graphs, all this kind of stuff, keep it big picture, make sure they understand the you know the details. But keep it very, very Reader’s Digest level for them. So they’re and I don’t know if you remember the old magazine, Reader’s Digest for back in the day, right? It was it was a magazine written for adults, right. But it was written at a level where any 13 year old kid could easily comprehend everything in that magazine, same idea with our marketing, keep it at a level where any average 13 year old kid can get it. And you know, you’re right on target doesn’t mean that your prospective investors are dumb, not at all. It just means we want to keep it, you know, pretty light, and pretty easy to understand and consume. Does that make sense?

J Darrin Gross  38:01  

Yeah, no, that’s, that’s definitely something to keep in mind. And it’s really easy when you when you’re constantly talking with other real estate investors to, you know, get into the weeds and that but three, I thought was interesting, that stat he said, it was a 95% of, of people have never purchased correlation

Dave Dubeau  38:20  

of the general population has never purchased an investment property, their own

J Darrin Gross  38:25  

revenue generating property. I mean, that’s, that’s that right there to me is one of the key. I mean, that’s so critical to the whole understanding of the value of the real estate opportunity. Because I think most people, when they look at when they, when they do walk into a house, they think about living there and they think about, you know, having the the party or you know, whatever the Christmas or whatever, there’s that image as opposed to the the economic opportunity there. So that’s, that’s good.

Dave Dubeau  38:55  

Exactly.

Dave Dubeau  38:56  

So that’s that is step number three, that’s all about that constant, consistent communication, the marketing. Step number four, is really important. This is all about the trust factor, right? Because we talked about this earlier for somebody invest 100 grand with you, you need to know you like you and trust you with their money. So the good thing is if you follow this process, two out of the three are taken care of they already know you they already like yet. Now we got to work on that trust factor and the marketing out with a lot of that. But there’s also other ways, and again, here’s the cool thing. We need to be able to step into our position as a real estate professional. And a lot of people are freaked out about this and they say I’m not worthy. I’m not ready. I don’t have enough deals under my belt. Or remember that 95% of the non real estate people you know, have never ever purchased a revenue property have even got one deal under your belt. You’re ahead of 95% of the general population. So the other thing you need to remember is we’re not trying to make you a real estate expert in the eyes of the entire world. That’s not necessary. You’re not you’re not going to go head to head against Robert Kiyosaki. In Rich Dad, Poor Dad or anything like that, what we want to do is you want to make you seen as a real estate professional and expert in the eyes of your list of prospective investors, those 200 people, alright, so there’s all sorts of different ways you can do that. You know, getting interviewed on a podcast is an amazing way to do it. interviewing people on a podcast another great way to do it. Even just some simple stuff, dress the part if you’re meeting with somebody about and talking about their money, dress up a little bit, you know, guys put on a blazer, you know, show them some respect, it’ll get you respect back as well be able to speak knowledgeably and simply about your real estate investing strategy, whatever your main focus is, and your market be able to explain it again, Reader’s Digest level, and have good looking sharp materials. One of my pet peeves, Darrin is so called professional real estate investors with crappy business cards, crappy little things they printed out at home, or, you know, an inkjet or whatever, invest a few bucks in some really sharp looking business cards, invest a few bucks and getting some professional headshots taken. And use those in your presentation, use those on your website, have a good looking website, all of these things help a lot to creating that trust factor and being seen as a credible authority in the eyes of your prospective investors.

J Darrin Gross  41:24  

Got it. So we’ve got through for that. I mean, we’re building the trust. Yeah. And today hear you say number five was the

Dave Dubeau  41:33  

five is is starting to snowball effect and you’ve been in business for yourself, you understand as most mom and pop real estate entrepreneurs don’t. But once you get an investor on board, you know, do the absolute best job you possibly can for them, make them soup, it’s you know, under promise over deliver, we always hear that, but do it right, under promise over deliver, make them ecstatic, they’re going to reinvest with you. And if you do it right, you can get very effective testimonials. And you can get warm referrals to their friends and their family because they hang out with other people with money to so do a good job for them. And that can help you just expand your sphere exponentially.

Dave Dubeau  42:15  

And that’s a five step process.

J Darrin Gross  42:18  

That sounds so simple, but it’s the execution there. You know, and I think it’s I think we we fundamentally, I think at a base level understand all of that. But but actually the the doing it and and also, I think that, you know, what’s key that I just heard there was about the the communication and the level of the communication, I think so often that it’s, it’s a kind of a challenge to try and demonstrate how much you know, so you start laying down a bunch of lingo and stuff. And it just kind of goes whoosh, you know, right past them. And

Dave Dubeau  42:51  

it That’s exactly right. My big plus is all my big brother, Dan is a very analytical guy weighs, you know, numbers, way smarter than I am. But the challenge is, when he talks to a normal person, and he throws all this data at them, their eyes glaze over, they roll in the back of their head, they get confused. And a confused mind always says no. Right? So he struggled, he struggled with with trying to raise money because he overwhelmed people with too much information. So it’s, it’s always keep that in mind. Right? They, they want to know that you know, your stuff, they don’t want to know everything, you know. And at the end of the day, Darrin, this resonate with me, at the end of the day, your investors are really investing in you. And the actual deal is just the security for their money. They’re really investing in you. The property itself is just the collateral. All right. That’s something took a while for that

Dave Dubeau  43:48  

to sink in for

J Darrin Gross  43:50  

months. That’s good. That’s really good. Hey, Dave, if we could, I’d like to shift gears here for a second. By day, I’m an insurance broker. And I work with my clients to assess risk and determine what to do about the risk. And there’s three strategies we typically consider. We look to see if we can avoid the risk as a first option. If that doesn’t work, we look to see if we can minimize the risk. And if we we find out that we can’t avoid nor minimize risk, and we look to see if we can transfer the risk. And that’s what an insurance policy is. It’s a risk transfer. Risk strategy.

Dave Dubeau  44:31  

What Yeah,

J Darrin Gross  44:32  

yeah, risk management strategy. And I like to ask my guests if they can take a look at their their own situation, whether it be their clients, investors, tenants, the market, however, you know, they can identify the situation and identify what they consider to be the biggest risk. And just for clarification, I’m not necessarily looking for an insurance related issue. Sure. But if you’re willing, I’d like to ask you, Dave Dubeau, what is the biggest risk?

Dave Dubeau  45:10  

Well, do you mind if I give you two answers? No, we will. So the biggest risk is staying stuck. That’s the biggest risk, right? Just trying to sell finance your deals and not growing your portfolio because you’re not going to achieve what you wanted to real estate in the first place. Okay? So beyond beyond the hoody, Flutie whoo, whoo, kind of big risks. The tangible risks, the biggest tangible risk I see with people when it comes to raising capital is crossing the line with the Securities and Exchange Commission or your your local authority. I see people making this mistake a lot. And sometimes they get away with it for a while, but eventually it catches up with them. And it can cause a whole world of hurt and expense that you don’t want to go through. So the process I’ve walked through through here today is a very good one. And it also I also highly, highly recommend, talk to a real estate lawyer in your area, explain what you want to do, and see what do you need to have set up to do it properly, maybe you don’t need anything, if you’re bringing somebody on board, as not only a money partner, but actually a joint venture partner in a deal, you might not need to do anything, because they’re your equity partner. And they’re actively involved, not just with money, but they’re actually doing something. So you might be exempt that way. But make sure that however it is that you’re bringing your investor partners on board, you are compliant, and you’re not crossing the line with the Securities Commission.

J Darrin Gross  46:51  

Now, those are our words of wisdom that I think any investor looking to raise capital should pay heed. He certainly wouldn’t want to be that guy that, you know, crossed that line and ended up having all sorts of additional problems. Dave, Where can the listeners go if they would like to learn more or connect with you? Well, thanks, Dan. So

Dave Dubeau  47:15  

basically, my main business is I have a boutique marketing agency. And everything I just talked to you guys about today, we help our clients actually implement everything that we’ve been talking about. So the best first step would be for you to get a complimentary copy of my book called The money partner formula. I’ll trade it to you, I’ll trade you a PDF of my book, in exchange for your name and your email address. And that’s how we can get connected. And the way you can get the book is that investor attraction book.com. Darrin, I have spared no, it’s no time or expense of putting this sign together for your for you and your listeners. There you go. Investorattractionbook.com. That’s where you can get a copy of the book. And that goes much more in depth into everything we talked about here today. And then you’ll be in the loop. And if you’d like to attend one of our full day workshops, where we really roll up our sleeves and dive into this, that would be great. And if eventually you decide that you’d like to work with us as a client, we’d love that as well.

J Darrin Gross  48:20  

Awesome. 

Dave, I can’t say thanks enough for taking the time today. I’ve enjoyed our talk. I’ve learned a lot. And hope we can do it again soon.

Dave Dubeau  48:30  

My pleasure. Thank you very much there and keep doing what you’re doing.

J Darrin Gross  48:34  

All right. For our listeners. If you liked this episode, don’t forget to like, share and subscribe. Remember, the more you know, the more you grow. That’s all we’ve got this week. Until next time, thanks for listening to commercial real estate pro networks. cr e pn radio. 

Announcer  48:54  

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