How To NEVER Run Out Of Criteria That Attract Investors – Natu Myers of

Before all this process, you’re never going to need to ask anybody what is the hurdle rates, what is the preference or and what are the terms that you need to offer people for you to be able to close your deal? And I’m going to walk through this process. So ideally, what you want to do, many people, they ask me, Hey, what, what, what are the preference or in the terms, the interest rate? You always ask me, what are investors invested in right now and what terms should I offer people? And when people ask me this question, you know, yeah, like I answer it and obviously they’re making their own decision, but it’s really critical to have a good decision making, good decision making process because even if a seasoned vet on Wall Street tells you what to invest in or nothing to invest in and tells you what investors are invested in right now, it may not apply to you. And if you follow, this is really the scientific process at the end of the day and out of any process that human beings have created to understand the truth and how the world works. This is the only process that I know that is solid in terms of understanding the truth in your situation, because the only way to understand the truth in your situation is really to test it. And unless you’ve tested something, it’s not true.  (how to attract an investor)




Like, unless you’ve done something, it’s not true. And the truth changes, right? It changes over time in terms of your specific situation for you to test out if investors are going to invest in your deal. And understandably, yeah, like it’s really hard to know what investors would invest in. So people usually waste too much time guessing what it would be, and then they pay investors 200,000 to build out a fund that nobody invests in and then they get no results because it’s like a moving problem. It’s like a moving target problem. So the way that people find a shortcut around this is to ask people, what are investors invested in Wall Street bankers? This guy, that guy Natsumi, somebody else, this person, this chorus, that thing. What are investors invested in and what right now? What are preferred terms right now? So, you know, there are a few ways to understand. Like what? To have a perfect guess on what are people doing right now. But I’m just going to preface this preface this by saying the only way to know what’s true is to test it and then to see what the results are, because everything else is really just a guess. So so how do we find good guesses in what investors are investing in and what are they looking for in terms of hurdle rate and all that? So you want to you know, when you go out and ask people, what are investors invest in right now? Really there are two things that you want to focus on in when they give you that feedback. (how to attract an investor)

Number one is probably recency because the market changes over time, so it’s best to ask them, when did you notice this? So for example saying, Hey, hey, I asked somebody, Hey, what preference earns are you seeing right now? It’s like, oh, 8% say, oh, when was that? Say, oh, yesterday, then that’s a much better guess than if you have people telling you, Oh, hey, what returns are you seeing now? 12%. When are investors asking for that? Six months ago. So the time is very important because things change over time. And when you understand this, then you’ll make sure that you rank the probability of somebody’s guess being applicable in your situation. And if you have ten people, you ask, Hey, what, what, what waterfalls are you seeing? What hurdle rates are you seeing? What this are you seeing what that are you seeing? If you’re able to rank these things by how recently somebody has done a deal, you have a better decision making criteria. You know, that’s why, you know, in our groups, we have a lot of people that they get investor information from deals that have closed recently and based on getting the data on when people have closed deals, people are able to make better decisions on when they should actually take action. (how to attract an investor)

So that’s number one. Number two, this one is really easy. He’s understanding the context. How similar is somebody situation to you and by understanding how similar somebody’s situation is to you, you’re able to then see how how what, how high the probability is that that will happen in your situation. There was somebody in one of our members or clients, they set up a hotel fund hotel revenues very lumpy because as you know, it can be a seasonal business. So a hotel fund, they had better at the time of the recording of this video, they had a deal where they had high preference or they had high performance fees and they had a high. So if somebody if they help make 100% profits, they took a bigger chunk of the deal. But if you talk to somebody who’s a multifamily investor and they’re sending multifamily funds or multifamily like an apartment building basically, and are creating a fund to buy these types of buildings, those ones are are more stable because they’re less seasonal, especially if they live near like a government town where everybody is working consistently and can pay rent. So it’s really important to understand those two different nuances. (how to attract an investor)

And if something is more similar, if something is. Very similar to you. Like, for example, hey, somebody who closed 200 deals in Texas is telling you that preference earns a 6% for residential deals. And then you have another person that closed only one deal in Texas and then they’re telling you, hey, preference earns a six or like 12%. Then you’re probably going to want to go over the guy who closed more deals because there’s more experience there. But you may not. Also because if the person is in a different situation than you like, for example, one time when I was in university, I asked somebody, Hey, what’s a good elective course for me to take when I was in computer science way back in the day and when I was in computer science, somebody who was in biology recommended I take pharmacology because he said that that was a bird course. It was very easy. And so me before I had a decision making framework to this extent, I took it because somebody told me it was easy not knowing. It was pretty hard for me. It was harder than my even main courses. It was harder than my fourth year courses, and that was only in like second year. And the reason why that course was harder is because the person who took that course and said it was easy, it was in biology and myself, like me, I was in I was in computer science. (how to attract an investor)

So different things that are hard for me were easy for him. And so if somebody who close 200 deals tells you, hey, it’s really easy to find investors, but in the person who’s been raised in private equity funds and they raise like a billion in the last like 40 years versus you who hasn’t closed like your first syndication in your life, It may be easier for him to do that than you. And if it’s easier for him to do that, then you may want to weigh and adjust based on how similar his context is to you. Because unless you can get into an environment where you can reproduce every single variable exactly as it is, you cannot reproduce anybody’s experience. So that’s why it makes no sense to either be jealous of people or to even try to copy people verbatim. It’s just supposed to be a guide for you to know, Hey, what is the market doing? So at the end of the day, if you want to know what investors are investing in, yeah, you know, you don’t have the time to actually go out and guess or go out and tested because maybe you don’t have access to your investors. So when you ask people, make sure that they’ve done something recently and make sure that they’re in a similar situation as you and make sure there’s a lot of information there, because if you do that, then you’re able to make a good guess. (how to attract an investor)

So once you make a good guess based on, hey, you know, yeah, do your deal like this, have this hurdle rates, have this waterfall structure, invest in these types of assets, don’t do development. Once you understand what people tell you, then you perhaps wants to test things. And this video is not going to go into that. We’ll have other ones for that. But when you test things, make sure you do it in a low risk way so that you don’t waste a lot of your time and spend tons of time building something that people don’t want to invest in. And by the time you figure out what people want to invest in, what people want to invest in is changed. It’s kind of like people who waste a lot of your waste out of $300,000 in university, and by the time they finish perhaps the PhD that they got, people are not hiring for that anymore because the market has changed and the job barely exists anymore. Similarly, if you waste 300,000 building a private placements because you think you know what the market wants better than the market and you didn’t ask the market, then you may be off. (how to attract an investor)

But in a ways to reduce that risk is to just talk to people who have done things recently and to build out the deal of your own. Because at the end of the day, that’s why one thing we realize is talking in groups and having group kind of group facilitation with people who are run private equity funds, who do syndications, who close deals, is one of the best ways to know what’s happening in the market, because you get to see what’s happening to live because communities and groups are very critical and getting access to groups. That’s the new education, because groups tell you what’s happening now and what’s working now, whereas static information changes unless there’s like feedback to the market. So if what I’m saying is making a little bit of sense, what do I do and where do you want to go? Just head to raises dot com book a call with us if you want to set up a real estate private equity fund or a syndication in two weeks or less so that you’re able to actually hit the market with their network of investors. But with this, if you like, this video, hit the like and subscribe. But other than that, we’ll see you in the next one. And good luck testing to see what investors are investing in for your deal.  (how to attract an investor) on LinkedIn

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