Session 7: Qualifying Investors – Finding The Good Ones And Avoiding The Timewasters; What’s a CRM System And Why You Need One

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Qualifying Investors – Finding The Good Ones And Avoiding The Timewasters

RELATED: Questions to Ask Property Investors

Finding buyers for your sourced deals can be a challenge. Finding the RIGHT buyers is even more challenging. Wasting time with the wrong investors could cost you more than just your sourcing fee. Mark runs through what questions you need to ask to qualify investors and the tell tale signs you need to be looking for. You’ll learn:

  • The questions you need to ask any investor so you know they’re serious.
  • The documents you need to see and the checks you need to make to qualify any investor
  • When you need to ask for a ‘reservation’

What’s a CRM System  And Why You Need One

If you’ve got any intention of sourcing more property deals and growing your property business then you absolutely must have a CRM system. But what exactly is it and how do you even go about choosing the right one? Brad will set you straight in this episode. You’ll learn:

  • Why and how a CRM system will help you grow your business.
  • How a CRM system can help you make better decisions for your business.
  • The three types of CRM systems.
  • When the right time is to get which CRM.

To follow is the transcript of the Facebook Q&A, Sourcing With Mark and In The Lab With Brad.

The Goliath Facebook Group Q&A Session
“Any advice on building an investor database or tips on how to sell on fast?”

Mark: The Facebook group question this week is by Glen Reece and so thanks Glen. Hopefully, you’ll find our answer useful and the question is, “is there any advice on building an investor database or tips on how to sell on fast.” So with building an investor database, what we’re looking to do is build a list. So the more investor details you have on the list, the theory would be that the quicker you are going to find selling on the deal. Now, this isn’t necessarily true. It’s a bit of a myth and as Brad’s will no doubt testify to list building in the internet marketing world, it’s the quality of your list, not the size of your list. Size doesn’t matter, does it Brad?

Brad: No.

Mark: But seriously, it doesn’t and the thing is with investors, you will get a lot of investors who will if you put up a post on Facebook that has details of a deal, you will get a lot of that interest. Especially if the numbers are good, you will get a lot of interest but a lot of those investors are not ready to commit. They will waste your time. They are window shoppers. They are not prepared to put their money where their mouth is. They are not quite ready to commit yet but you will waste a lot of time with them. So with regards to building an investor database, you can build a list by using things such as social media. You can go on to the Facebook groups. There are literally hundreds of property Facebook groups out there. There are the BMV Deals, the Lease Option Deals, there’s the Goliath Sourcing Academy and there’s all sorts of Facebook groups you can go onto. Look for the investors that are actively looking for properties so the ones that are actually putting out posts that say they are looking for specific deals in specific areas. You can if I remember search Facebook for posts on… you can search for posts with certain keywords in them as well. Am I right, Brad?

Brad: Absolutely, yeah you can go into groups and search on keywords.

Mark: Yes, you can search for investors that way. You can put up a fake deal, not necessarily a fake deal maybe an old deal or deal you’re currently working on but isn’t quite ready to sell and start building up a list of email addresses that way. The only problem like we’ve just spoken about you can get a lots of people that are time wasters. So build your list up by looking for the active keen investors that are on the social media channels. You can also use Facebook Ads. Again, you can create Facebook Ad. You can list build that way. As to how qualified that list is going to be, I wouldn’t be overly confident. You’ll get a lot of people registering but maybe are not ready to commit but one of the best ways to build a solid investor database is to go and meet people at networking events. So go and meet people at networking events.

There are hundreds of networking events around the UK that you can attend. They’re ranging from free events up to sort of paid for events and at this event, you will meet investors. The very fact that they’ve already taken a step to going to a networking event is a sign that they are ready to at least make some sort of commitment to property investment. You can build that relationship and then clearly, you’ll have a qualified investor database and in terms of how to sell on fast, again the key to selling a deal quickly is to have a qualified suitable investor right from the beginning. So that really is sort of a brief… There’s a whole section in the academy on how to build lists for investors. In the podcast, we’ve only got about 10 minutes but hopefully that will help you go in in terms of just get on social media, you can run a couple of Facebook Ads and also networking events, build up a list of people that genuinely are looking for deals and then you can go and find those deals for them and of course, sell them very quickly.

Brad: Great stuff. Glen, thank you for that question so if anybody else has got another question for Mark or myself for that matter, go to goliathfbgroup.com. Get involved in the conversation there. We got a lot of thread at the top pins on the top there now where you can introduce yourself and tell a little bit about yourself as well and that’s a great starting point, introducing yourself to the whole networking process as well.

‘Sourcing With Mark’ – Innovative and Advanced strategies for doing better property deals
Qualifying Investors – Finding The Good Ones And Avoiding The Timewasters

Mark: So in this session of Sourcing With Mark, what I wanted to do is follow on from the Facebook Q&A with regards to how to find investors to buy your property deals and the next stage on from finding the investors is actually going to be qualifying those investors. So knowing that investors are solid investors, good investors, and reliable investors because there is nothing worse than getting to the end of a deal and having your investor pulling out because of inexperience, fear and really it can happen. There’s a lot of things that you can pre-empt that you can prepare for in order to avoid that happening. Now, I’m not saying that every deal is going to go through. Deals do fall through and not because the investor has pulled out because of inexperience but what we want to do is we want to make sure that the investors we’re working with are qualified serious investors. So I want to run through exactly how we qualify these investors, how we decide on whether to proceed with an investor or not and obviously having the confidence to be able to tell an investor that we can’t work with them for a particular reason is tough when you’re first starting but it really will help you get more deals over the line with less time wasted and obviously make more money.

So moving on, what I wanted to do in this week’s Sourcing With Mark really is run through how the Goliath method of qualifying investors is. So we go through a two-stage process if we’re going to be working with our clients one-to-one and that process is asking a few qualifying questions, just making sure that they are suitable for working within a one-to-one basis and then we’re also going to need to see things like… well, I’ll go through them in a bit but we need to see a couple of different items just to make sure they are as serious as you maybe assess they are when you’re speaking to them. So questions that you’re going to need to ask are things like; how many properties do you currently have in your own portfolio? Have you bought a deal from a deal sourcer before? And things like how much experience do you have with the particular investment strategy that you’re packaging that deal on?

So what I mean by that is if you have a rent to rent HMO or rent to rent multi-let deal that you’re packaging and selling to an investor and if that investor has got no experience of managing a multi-let property and they’re choosing to manage it themselves i.e., they’re not going to choose to work with a managing agent to look after that investment opportunity then we will not work with them. And the reason for this is purely down to the fact that we are offering the sellers, the landlords a solution to their problems. What we don’t want to do is give them another problem and things like managing multi-lets are an incredibly difficult thing to do if you’ve never done it before.

So giving a multi-let rent to rent deal to a complete novice investor purely because they understand it’s a no-money down way of making lots of money, you are only going to give the existing landlord potentially a number of problems and you’re not really doing your job properly for the investor either because that investor is going to take that deal on. Now, I’m not saying every investor would struggle but the majority will probably find it hard to manage a multi-let in the first place and what are they going to do if they’ve not got experience of this, they’re potentially going to panic, they’re going to pull out of the deal, and you’re going to be left in a position where that landlord has got problems that obviously they’re going to come back and maybe look to you to try and fix. Now, they don’t really have any right. You’ve broker a deal but of course, you’ve built that relationship so you are going to feel obliged to help them out. So time wasted on something that you can start with at the beginning.

The other thing is if you’re working on deals such as flips or refurb converge at HMO converging projects, you’re going to want to know whether they’re buying with cash or they’re going to need a mortgage and also do they have the funds to be able to do the refurb for example. So we need to know that all of that is in place. Now, what that brings me on nicely too are the items that you will need to see. So things that you are going to need to see when you’re qualifying your investors is going to be items such as proof of funds. Now, proof of funds needs to be something like a bank statement and that proof of funds needs to demonstrate their ability to buy cash.

So if they’ve got the money to be able to buy cash, we need to know that those funds are there. There is nothing worse than getting to the point of a cash purchase and the investor suddenly turns around and goes, “Oh I haven’t got the cash, I need bridging finance.” Now, a lot of people will say that bridging finance is like cash. It’s only like cash when you get it given to you so if the bridging company doesn’t give you the funds, that means that you don’t have the cash which means you can’t go through with the deal. So you need to see the proof of funds. If they’re getting bridging, if the investor is getting bridging finance, we need to see proof and a letter of intent to give that bridging finance. So we need to know that they are going to get that money because deals will fall through without that.

Now, the other thing you need to prove is if they’re buying with a mortgage, we want to see an agreement in principal so a decision in principal from the mortgage provider, the buy to let mortgage provider. Again, mortgage products can be withdrawn right to the last minute for one reason or another but the fact that you’ve got a decision in principal, an agreement in principal demonstrates that that investor has gone through the process of applying for finance and has something that has said that at that point in time, it has to be within the last sorts of month or so that product is available to them should they need to move forward. The other thing then if you’ve got a mortgage is that you also want to still see proof of funds of their ability to be able to pay the deposit or to pay the refurbishment cost as well. So that really is important.

And the final thing that we ask for is if the investor states that they have got properties in their portfolio, we will ask for proof of the rental properties, their ownership of those rental properties. So this just gives us proof that they have got other properties and that they’ve been looking after them. It is items such as their insurance documents to prove that they’re the owner on each address or landlord policies for example and things like that just help us to really sort out the wheat from the chaff really. Also what it does is if they are struggling to give you this information, they now will say that they don’t have the finance because if I’ve got the finance and the sourcer was to ask me to prove that I can proceed with the deal if one comes my way then really, I’m going to show them that there’s no reason why I can’t. You can blind cap all the details. You just need to know name and the balance of course and that just proves that you can move forward. And having that information as a sourcer that will really help you when you’re negotiating a deal especially if you’re working on a VIP sourcing toward a basis.

Now I’m just going to quickly go through a couple of other things that are worth considering when you’re working with investors. Now, we work on trust. We work with clients that we know well, we trust and we’ve met but we also have things such as sourcing contracts, NDAs, nondisclosure agreements. These are primarily used if we’re going to be sourcing to a list. So if a person is on our list, we have a deal, they show interest and they want to proceed, we will then send them out a contract to sign in order to agree to our terms and conditions of business, get our fee paid, etcetera. Now, there is an argument, a longstanding argument in the sourcing world with regards to reservation fees, non-refundable reservation fees, holding fees. Some people charge £500 and some people charge 50% of the sourcing fee. Now if you got a charge to a reservation fee, you’re going to have to give a lot of information about that deal before you can charge a reservation fee but once that information has been passed on to the investor then you can ask for a reservation fee to hold their interest, to lock down their interest. Serious investors shouldn’t have an issue with paying a reservation fee if you’ve given them enough information to be able to assess whether that deal is correct.

So really just to conclude and I know it’s always very brief in Sourcing With Mark but really, summary of what you should be doing when you’re working with investors, you should be interviewing your investors before moving forward. Now if you’re doing this VIP, you can do this prior to finding deals. If you’re doing this post a deal being sent to a list, just make sure that you’re qualifying those investors on the phone before you start really moving forward with them. Make sure they understand the terms, both the deal terms but also your fee, sourcing fee, when it should be paid, reservation fees and etcetera. Decide on whether you’re going to charge a reservation fee so we don’t but we source to order.

So if we were sourcing to a list then we would start to source with a reservation fee again. And also be strong and confident in your deals. You are the one with the deal so you are the one in control. Remember that. The investor needs your deal. If they’re not interested in complying with your terms and conditions with the things that you’ve stipulated and your deal is excellent, you will find another investor. You just got to be strong, you got to be confident in your deal and if they won’t comply with the terms, move on to another investor because you will find one. And hopefully, that really summarizes qualifying investors, working with investors and really ensuring that you get your fee paid every time.

‘In The Lab With Brad’ – Marketing, systems and outsourcing hacks for property pros
What’s a CRM System  And Why You Need One

Brad: Hi and welcome to this episode’s In the Lab With Brad, “what’s a CRM system and why you need one.”

Now, there’s been a lot of talk about CRM systems lately in the Facebook group so I thought I’d take this opportunity just to explore the topic a little bit and maybe help you gain a little bit of clarity as to kind of the landscapes. So now when people talk about CRM systems, they’re usually referring to a tool that helps you manage your contacts, sales management and the productivity of your sales pipelines so the efficiency of the pipeline and how quickly sales are closed through that pipeline. Now in property, CRMs haven’t been relatively prevalent. I think that’s traditionally, we don’t see the seller or motivate the seller or a landlord as a customer or such. So maybe that’s one of the reasons why CRMs haven’t necessarily been talked about a lot in property circles up until relatively recently.

So now, the market for CRM is pretty broad and deep so we’re not going to be able to cover and even almost touch the sides. I’m just going to try and give you a top level as possible in this particular segment. Now, the levels of sophistication of CRMs have rocketed over the last few years but that also provides why that’s a great thing and there’s some great opportunities to really take on the functionality if you like a CRM system. It also provides us with a bit of a headache because which CRM system is best to use. There’s so many different features, etcetera but we’ll cover that a little bit later on.

Now, let’s have a look at some of the problems that you might be going through now if you’re not necessarily using a CRM system either at all or possibly in the right way. Now, the biggest problem is you’re going to be having a big difficulty in keeping track of all your leads as they come in. Now, as you grow, you’re going to have leads coming in from multiple platforms from the phone, from email, from social media, from networking events, etcetera, and etcetera. Now, it’s really not feasible to use a notepad and write everything down. Now, you can take notes when you’re out and about for example when you’re seeing estate agents, etcetera but your data needs to be really be recorded somewhere or it’s going to get lost or worst, still it gets lost and totally forgotten now. Also when you’re talking to sellers, landlords and investors, you’re collecting a lot of data from them and a lot of information about them.

Now that needs to get logged and stored in a place that can be easily accessed and where the info can be easily understood when you come back to it so you’re putting it in a place that you can go and find it but you can also understand that information as well. So you might be coming back in a few days, weeks or months down the line so it’s really important that you can find it and you can understand it. Now, spreadsheets which a lot of people use can be effective but they just are not a long term solution. They’re difficult to share, they need to be… you need to be a bit of an Excel genius to be able to extract the data and report on the data that you need as well. You risk losing data. One can kind of fell sweep of a delete button and then the save and then there’s the potential that you’ve lost that data. So as you grow or become harder and harder to go straight to the piece of data that you want if you’ve got this big long spreadsheet of data, I know you can go and search on data in there but the reality of it is it’s really not very user friendly when it comes to actually extracting the data that you need efficiently and quickly. Now if you’re going to be in business for the long haul, you need a CRM strategy for the future.

So let’s have a look at broadly speaking what the CRM is and the benefits of using one. Well firstly, they allow you to focus on the relationship that you have with a landlord or a seller. Now, you get easy reporting functions which allow you to see all your leads in one place and track the progress of those leads from anything from one to a number of leads in your deal pipeline. Now, this gives you the ability to focus in on specific opportunities that might for example give you your best ROI or a deal that needs some special attention for example. Now, easy access to the data and the resulting reports you’re able to generate allows you to make better strategic decisions for your business. For example, you can create a report that helps you to better understand your deal pipeline and how close you are to closing a certain percentage of deals and the cash that those deals would generate.

Now, that data allows you to now make this business decision as to what move you’re going to make next. Now as you begin to grow your business, you’ll start to build your team or develop part of your JV partnerships. You’ll need to share a part or all of your deal data with this people. Now, CRM system allows you to control what data you share. Now, you may have a scenario whereby a JV partner generates leads for you and you close them. That might be the relationship that you have. Now as he/she hands over the button from the lead generation through to you to be closing the deal, the information related to that deal needs to be very easily accessible and presented intuitively for that button changeover to be as efficient and effective as possible because ultimately your time is better spent progressing the deal rather than chasing out the information or trying to decipher the information that comes from spreadsheets or emails, etcetera. Now, a CRM allows you to easily access that info in one place and allows that changeover to be seamless.

Now, hopefully I’ve justified the need and the benefit of having a CRM system. The next thing is well what types of CRM system are there. So again, the topic of CRM is so huge but we’re trying to kind of narrow our focus down for this segment. I’m going to try and concentrate down on what use of property professional might require from a CRM and touch on some of the CRM apps that are talked about and I’ve seen talked about in kind of property circles and some of the Facebook groups, etcetera. Now, CRM systems have been traditionally used by salespeople. They would get a lead in from say cold leader or a website inquiry. That data would go into a CRM system and the salesperson would look to progress the deal either by phone or by email.

So systems like some of the brand names you might recognize here, SalesforceZoho CRMLess Annoying CRM, and SugarCRM. These are all great for this type of use. Each of these systems have a varying levels of sophistication in functionality but they essentially start out life in the way I have described by traditional kind of sales processes. They help that traditional sales process. Now, we’ve mentioned Less Annoying CRM a bit at Goliath in the podcast before and we’ve used that in the past to great effect. Now, a seller or a landlord lead would come in. We’d go into the CRM, we’d create the name and the stage for each deal pipeline for example one of the stages of the deal pipeline would be info gather, view property, office admitted, office accepted and deal progression. We’d input the data at the start of that funnel and we’d nurse the contact through each of the stages in that funnel, that pipeline up through to the end. Now, many of this what I considered to be traditional CRMs have worked flow features and automation features that for most people would be more than enough as I’ve described.

Now in the back of your mind, you might be wondering where the likes of MailChimpAWeber, and Mad Mimi fit in. These are kind of brand names. Now, a lot of people in property seems to use MailChimp. Now, these are essentially dedicated email marketing service providers. Now, while you could consider them to be customer relationship or CRM systems, their primary use is to store contacts and enable you to mass or bulk email those contacts from within the software itself. Now, the primary reason for mentioning the email marketing service providers as I have done is because you may have also heard of names like InfusionsoftHubSpotOntraport, and ActiveCampaign. Now these are the new breed of CRM softwares. Now in short, they fused together the traditional CRM systems like Salesforce and Zoho with the email marketing service providers ones like AWeber and MailChimp. Now, these new CRMs are like CRM systems on steroids and they’re generally known more as sales and marketing automation software so they allow you the ability to be able to create an end to end experience for your customer or seller based on their behavior.

Now, we use ActiveCampaign at Goliath. So for example, we’ll use the system to create Goliath Property Solutions I should say here when we’re looking to generate property deal lead. So we’ll use the system to create forms to capture leads through say a Facebook Ad. So we’d drive traffic to a landing page where the form which comes from ActiveCampaign sits will capture the lead and then we’ll send that contact, that lead, regular emails that nurture them down the path towards eventually contacting us and doing a deal with us. Now if you listen to session four, I actually go into detail about how we do that but not for this podcast we’re going further with that. Now when that lead is ready to contact us, we’ll turn them into a deal. Now, that’s when the more traditional CRM function kind of kicks in. So that’s where the two kind of fuse. I’ve hoped you’ve kind of understood that. Now, there’s a whole raft of other things that you’re able to do once you get under the hood in ActiveCampaign or the other email marketing software automation services like Infusionsoft, etcetera but really be on the scope of what we’re going to be covering here for now but suffice to say, it’s pretty mind blowing what you can do when you actually get under the hood there.

So let’s just try and summarize. So by now you’ve hopefully got a clearer picture as to the CRM landscape. So which one do you go for? Now, the answer depends on what you’re trying to achieve. Now, people have their favorites and I know for me, I’ve used Zoho CRM in my other business for seven years now and it’s been absolutely fantastic. It’s such a great platform. It’s very robust. They’re always adding new features. The support is fantastic. All those other good things but when I started working with Mark, he was using Less Annoying CRM so we worked with that and it did a great job. So if you’re just starting out, I would recommend either of this two, Zoho CRM or Less Annoying. They are both either low cost or free, easily customizable and it can adapt to your current kind of deal pipeline process as well.

So now recently, we’ve moved on to ActiveCampaign and it’s paying dividends for us but I would say ActiveCampaign and the more these marketing automation CRMs like ActiveCampaign and Infusionsoft, they are not for newbies. You’ll be utterly overwhelmed by what you can do in there. So I would stay away from those for now, start off on the more traditional Zoho and Less Annoying and hopefully that should give you a good kind of head start. Now to accompany this segment, I’ve put together an evaluation checklist for you. It’s actually a CRM systems evaluation checklist. So it just gives you a nice good solid list of all the things that you should want to be considering when you’re about to commit to a CRM system. So you can go and grab that at goliathsourcingacademy.com/session7.