Building a Successful Real Estate Capital Markets Group

In the first post of this series about building a successful commercial real estate capital markets group, we will cover some basic principles and useful applications that will help organize larger fundraising efforts. Then, in subsequent posts, we will touch upon the following four distinct investor channels and how to best structure your organization and communicate with each:  

• High Net Worth Individuals
• Broker-Dealers 
• Registered Investment Advisors (RIAs) 
• Family Offices/Institutions (FOIs) 

Finding the right investment channel(s)

For many real estate firms, finding the right investment channel(s) and making the transition from friends and family capital raising to coordinated enterprise fundraising can be bumpy – but it doesn’t have to be. With a clear vision for the process and an understanding of the time and financial commitment, any team with a positive attitude, focus on the controllable, great track record, and an A+ team can find success in building a real estate capital markets group.

Large-scale fundraising, where to begin

The road to success in large-scale commercial fundraising can be long and arduous, and it is crucial to have a defined game plan before starting. Chances are that up to this point your growth has been incremental. Maybe it started with one or two individuals who trusted you enough for a first deal along with your capital. You had success, they told their friends, you had more success, and so on. It probably took some time to build strong relationships with lenders, brokers, your business partner, contractors, buyers, sellers, and the​ list goes on. Large-scale, commercial fundraising is no different.

Effort and resources will vary some from channel to channel, but the overarching idea is the same: it takes time – and​ money – to break in, but once there, the deal nirvana and the scope of the good work you can do for clients is always worth it.

Before starting this journey, there are some basic questions to consider.  

How are you contacting your prospects, qualified leads, clients, and other industry professionals? 

Calling and LinkedIn, the best initial outreach

Building rapport early is crucial to the long-term prosperity of relationships, and in some cases you may only get one shot (or at least one shot until that prospect completely forgets you exist, and then you may try again).

Calling is the best first step because in just a minute or two of a prospect’s time you can grab a nugget of personalization that can be your intro on your next call or interaction. One tip is to always start with, “It’s so-and-so from X,” as opposed to, “This is so-and-so calling from X,” and, “How have you been?” instead of “How are you doing?”

Little tricks like these might sound strange, but if you build the habit, before long people will think they’ve known you for ages instead of minutes when you first call. Emailing won’t yield the same results.

Additionally, using LinkedIn and pulling something unique from the prospect’s homepage to use in your initial outreach will immediately set you far and above the majority. There are many other reasons LinkedIn is a truly great way of communicating with prospective clients. For a full list, check out​ LinkedIn Sales Navigator. 

Tip – If you are interested in large-scale automation of LinkedIn, there are groups that can help. Social Lead Sniper ​is one of my favorites. 

Reaching out through email

Once you have made contact, email is the preferred method of most business professionals. One way to personalize  email and automate your outreach is to use signatures for Outlook or canned responses for Gmail. Using these features will save your sales team a lot of time. It creates a static block of information for about 90% of the message being delivered and adds a touch of personalization for the rest.

For example, let’s say your sales team is emailing prospects and current clients about an upcoming webinar. You may ask them to create the following Outlook signature for the campaign:

Dear [prospect name], [personalize first sentence from CRM notes].

Positive Vod Contacts is hosting a webinar on October 1 202x, at 10 AM PST to discuss email marketing strategies. We would love for you to join us if you have the hour open.

If you would prefer to have a 1 on 1 conversation you can book a time on my​ calendar. — Best Regards, [your first and last name] [your job title], [your brand name] m: 123-456-7899 o: 949-356-6887 a: Remote

In the example above, the only pieces of text that need to be changed are the prospect’s name and the first line. 

Tip –​ Hunter is a great free Chrome extension for scouring the web to find emails.

Attending conferences and networking events to build a successful real estate capital markets group

One of the best ways to meet new prospects is through conferences and networking events. However, if not well-prepared, these events can be costly, time-consuming, and frankly not worth it. One that I hear every sponsor mention as a must is ADISA.

Another resource that can provide great information (at least pre COVID-19) is​ ExpoIQ.

For the sake of brevity and due to the uncertainty in the event space moving forward, I will rest my case with just these two brief examples.

How are you keeping track of interactions with your prospects, qualified leads, clients, and other industry professionals? 

We all know the term CRM, customer (I prefer “client”) relationship management. Until now, you may have thought about CRM systems as glorified ways to track opportunities on Excel. Or, you may have even gone one step further and thought, “I’m a super smart, successful real estate professional. I’ve got everything upstairs. Steel trap.”

Not anymore! If you plan on extending your reach, having a functional CRM is crucial. If this is already a staple of your business, hearty applause and feel free to move on. Or not, if you have a CRM that is not working properly, read on. 

CRMs personalize your relationships 

In today’s world, finding the balance between automation and personalization is crucial in any sales organization. Without automation, it is easy to get bogged down, and without personalization you’ll never get a stranger or RIA to respond to you. An organized CRM system will allow you to track ​when ​and​ how ​you last contacted a prospect and who you last contacted.

It is not uncommon in a 10-person RIA office for the first three calls to be between your investor relations team and the front desk. Make sure your team takes notes on who sits at the front desk (gatekeepers) and some of their hobbies. A quick sentence about a trip they are taking or a life event could literally be the key to the castle and the start to a long relationship with the firm. Oh, and one more thing, don’t forget the gatekeepers once you’re in, they – and their bosses – will notice. Take a look at the Janover Connect blog How to Humanize Real Estate Investor Relations for more information on ways to personalize.   

A good CRM will track all of your interactions with prospects and clients (phone, email, social media, and in person) and when the interactions occurred. Use every piece of information wisely and create an algorithm for how to follow up from first contact to final sale. Make sure your team understands how to use the CRM and how to update it properly. CRMs sound simple, but too often they are not used uniformly or even not used at all.

There are many great CRM services and many factors to consider when purchasing. For small teams that want a lot of customization and a low-cost budget, my favorite is Less Annoying CRM. It is a simple system, the customer service team is amazing, customization is super easy, and it is $15 per user per month with no bells and whistles. If you decide on LACRM, use this shameless referral code to give us both an extra month free. However, for larger enterprises and teams that are comfortable with many integrations, Salesforce, HubSpot, Copper, and others are great too.

Real Estate Capital Markets Channels

Now that we’ve gone over some basics of reaching out to prospects and keeping all those interactions efficient and organized, the next step is to dig into the details of some specific capital channels, including the necessary real estate capital markets players, where to find these channels, and what they are looking for.

We’ll start with finding and marketing to the lifeblood of the commercial real estate world, High Net Worth Individuals, in the next post. Then, we’ll move on to Broker-Dealers, Registered Investment Advisors (RIAs), and Family Offices/Institutions (FOIs) with subsequent posts.