elevator pitch

Tips for Nailing Your Elevator Speech

When you first meet someone — even if you don’t already know you’ll be working with that person on an investment deal — it’s important for you to have a polished “elevator pitch” or elevator speech prepared. Why? Because the first impression is the most powerful; it can make or break the potential relationship. You only get one chance to sell yourself.

What is an Elevator Speech?

It’s a short introduction of you and/or your company succinctly explaining what you do — like a script — that grabs the other person’s attention and makes that person want to learn more about you.

The key is to keep it short — typically you want to deliver your pitch in 2 minutes or less, the time you might spend in an elevator with someone where you have their undivided attention.

Think of it this way: If you succeed in interesting them in what you have to say on that short elevator ride, they will stick around after the elevator door opens or ask to meet with you later for a more in-depth discussion. If you fail to grab their interest, they’ll walk away and you’ll probably never see them again.

Are you actually going to deliver this pitch in an elevator? Maybe, but more likely you will be meeting the investors — sophisticated, non-sophisticated, accredited — at real estate investor association gatherings or meet-ups, Chamber of Commerce or Rotary Club meetings, or other gatherings of potential investors.

Tips for Nailing Your Elevator Speech

Here are some tips to help you be prepared so you’ll nail your introduction:

  • Rehearse your “pitch” — After you’ve written your speech, practice it in front of a mirror and time your delivery to make sure you’re keeping it short.
  • Dress appropriately — Don’t be overdressed, but also don’t underdress; be attired just a notch above the crowd. For instance, if your crowd is likely to be in jeans, it’s OK to dress casually, but don’t wear jeans yourself. When I addressed a crowd like this, I wore a fresh pair of cotton slacks and a nice scarf shirt.
  • Talk slowly — People want to understand what you are saying, so watch your speed. And speak with conviction, resolve and confidence.

Practice and listen to yourself to find out how effective you can become. The goal is to create enough interest so that you can send your potential investors the “Investor Accreditation Form.” Under SEC regulations, you need the Investor Accreditation Form to be signed before you can talk with your new potential investors about the deal.

 

What Should You Say?

Here is an example of a pitch I like to use:

“Hi. My name is (xxx). The name of my company is (xxx). We buy commercial real estate in emerging markets. Those properties produce good cash flow and a strong back-end. I am always looking for investors to collaborate with, and I am willing to give you an equity position. If you would like more details I would be happy to talk with you.”

It is a very simple approach to say we buy commercial real estate in emerging markets. We produce good cash flows and a strong back-end — or the equity gain when the building is sold. And we are willing to give our potential partners EQUITY position, not a DEBT position. Instead of borrowing the money at a simple interest rate and paying them back, we are giving them the cash flows and a portion of the equity gains when we sell the property.

After this short introduction, some people will be interested in knowing more.

OK, You Have Their Interest. Now What?

Following are some key phrases I throw into my follow-up conversations. Yours might be different; however, the results should be the same because you are piquing their interest.

The key phrases you want to use are:

  • “We take a conservative approach.” People like to hear that you are taking a conservative approach and can provide very detailed information in writing about the project you undertake.
  • “If you are interested, I give my investors the majority of the cash flow and the majority of the equity. I want you to have a lot of incentive to participate in my deals.”
  • “We only buy in areas where there is a predictable path of progress —where the jobs are coming, where the new businesses are moving in. And we do a lot of research with the local Chamber of Commerce, economic development groups, U.S. Census Bureau and others. They provide us lots of extensive information that we use to identify where we are going to acquire our investments.”
  • “We like to buy ‘B’ and ‘C’ class properties in ‘A’ and ‘B’ class areas.”
  • “Exit strategies: value play, momentum play, etc.” (Value play is when you renovate the building in order to increase the value of the property. Momentum play is when the cash is already flowing and you can start paying cash flows to the investors from day one of operation. It is not that you are repositioning where the investors will not get some kind of cash flow for about 6 months or one year. This momentum play is already working. We can start paying them the cash flows. It is 90% or 95% occupied so we have the ability to increase the value of the investment.)
  • “We typically want to be in and out of the marketplace within 3-5 years, depending on where we enter the cycle of emerging markets.”

 

How to Handle Objections

When handling objections, you should not answer until you have their signed Investor Accreditation Form because you want to know if they have money or other qualifications. If you want to establish a relationship then it is worth it to address their objections.

Potential investors may first ask such questions as:

  • “How much do I need to participate in your investment?”
  • “What kind of returns are you paying?”
  • “How much money can I make?”

Here’s what you can say at that point:

“Since our company is SEC-complaint, we follow all the rules and regulations put forth by the Securities and Exchange Commission. What I would like to do is send you the Accredited Investor Form. Once I have received it back signed and dated, I will call you to set up a meeting. We will discuss your concerns and I will answer all your questions at that time.”

This is the close. Make sure you get the investors’ contact information so that you can send them the Accreditation Form and follow up. Once you have received the form, you have closed one of the most important parts of the deal.

Keep Track of Those You Meet

It’s important to keep track of who you have met and what you talked about.

You can start an Excel worksheet or other spreadsheet listing all the potential investors and the meetings you have had with them. Add each of these people to your database. Keep these leads “warm.” Send them articles and newsletters and other things to keep the lines of communication open.

Good luck to you.

About the Author Vinney Chopra

Vinney Chopra is the Founder and CEO of Moneil Investment Group and President of Ideal Investments Group. Since coming to the United States more than 40 years ago - with only $7 in his pockets - he has built four successful businesses as well as his passions: a multifamily syndication academy and youth academy. With a bachelor's degree in mechanical engineering, he added a master's degree in business administration in marketing from The George Washington University, shifting his focus to marketing and motivation. He has been a professional fundraising consultant and motivational speaker for more than 35 years and also is a licensed real estate broker in California. Vinney and his wife started their real estate investments in 1983. He currently owns single-family homes and multifamily units in Texas, California, Atlanta, Arizona and India. People often call him “Mr. Enthusiasm” or “Mr. Smiles” for his positive attitude and commitment to bringing great value to everyone whose lives he touches.

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