Ep #423 – Michael Blank – Raising Capital at Scale
Here is some of what you will learn:
- The big mistake syndicators make when trying to raise money
- Scaling capital raising
- Your online platform
- How to continue the conversation
- Attract, capture, serve, lead, promote
- Lead magnet
- Value + Consistency = Trust
- Curate or create
- Overcoming Perfectionism
- The dumbest thing ever (investing in stocks)
- 506(b) vs 506(c)
To find out more about our guest click here
To find out more about partnering or investing in a multifamily deal: Text Partner to 41411 or email Partner@RodKhleif.com Join us at a Multifamily Bootcamp, visit: MultifamilyBootcamp.com
Watch on YouTube!
Do you want to learn more about Multifamily Real Estate Investing? Work with Rod in the Lifetime CashFlow Academy’s Multifamily Course & Coaching Program
Full Transcript Below:
Ep #423 – Michael Blank – Raising Capital at Scale
Hi, my name is Rod Khleif and I’m the host of “Lifetime Cashflow through Real Estate Investing” Podcast and every week I interview multifamily rockstars. We talk about how they built incredible wealth for themselves and their families through multifamily properties. So hit the like and subscribe button to get notified every Monday when a new episode comes out. Let’s get to it
Rod: Welcome to another edition of How to Build Lifetime Cashflow through Real Estate Investing. I’m Rod Khleif and I’m absolutely thrilled you’re here. And I get the pleasure of introducing and interviewing my friend Michael Blank. Now if you don’t know who Michael is then you’re definitely not in the multifamily game. He’s got his own incredible podcast, his own thought leadership platform, and because he and I do not have a scarcity mentality, we absolutely support each other and help each other and that’s why he’s on my show today and he’s become a good friend. And I’m just a super excited to spend some time with him. Welcome brother. Good to have you here.
Michael: Rod, great to be here
Rod: Yeah so you know Michael’s an entrepreneur. He’s author of the Amazon bestseller “Financial Freedom with Real Estate Investing”. His podcast is called “Apartment Buildings Investing Podcast” and he’s done a lot of investing on his own right, a lot of equity raising. And we’re gonna talk today about something that he’s created that I’m excited to hear about and dig into. And we’re gonna start with some questions but we’re gonna land the plane here towards the end with you know what it is that he’s doing and how he might be able to help you. So, let’s get right into it. I mean we’ve interviewed before. I know you’ve been on my show before. You’ve talked about your story. So, if you guys want to know his story I would say go listen to that initial episode. So, we’re gonna get right into content with Michael today so we maximize his time. So, the first question I’ve got for you my friend is what’s a big mistake that syndicators or wannabe syndicators are making when they’re raising money or trying to raise money?
Michael: Yeah, they think they’re in the real estate business and they are. And they are but they’re not just in the real estate business because and there are some people who may not be aware of this problem but if you’re out and you’re raising money, usually you start with your sphere of influence and that’s always advised people to start there. But it will come a point after having even raised some money you may be erased even half a million or even a million dollar which is fantastic it’s a great success but you will eventually realize that you can’t meet enough people. You can’t have enough meetups where you can attract the capital where if you raise let’s say five hundred thousand dollars and you want to 10x that how are you gonna do that? You have no idea how you gonna do that and so Rod, you and I have been doing this for a while and maybe it’s second nature but the answer to this question is you have to move your marketing online. Your first your marketing is one on one word-of-mouth and you have to do that so you know who is your investor, what are they saying, what do they want, what are they afraid of,
Rod: Where are they hanging out
Michael: Where are they hanging out, and once you figure that out you need to scale it up. So, anyone listening to this who wants to scale their capital raising really has to pay attention to the stuff and it’s like a deer in the headlights every time I talk to people they go, yeah that’s exactly what I want. I want to 10x my capital raise and like well what’s your plan? I don’t know I can’t meet enough people and then we say, well shoot, what have you started going online? Oh yeah yeah yeah, I got it. I got on a podcast yeah, I got on a podcast and I got a social media. I said wow, that’s fantastic. How are you capturing all those podcast listeners? What do you mean? you know it’s unbelievable and I just slap myself up the head and it’s like I can fix this problem okay. I can literally fix this problem and I will. And we’re gonna do it on the show
Rod: All right all right all right so, and again I know all the answers these questions so I’m gonna try to ask them as questions not as answers but so what you’re proposing is an online platform yes? All right when you say online platform, are you just saying an online presence?
Michael: Yeah, I’m doing
Rod: What are your definition of platform?
Michael: Yeah let’s talk about platform. So, an online presence, that’s not an online platform. Neither is frankly having a podcast or even writing a book. It’s our components of the platform. The problem that people make is they put the cart before the horse. They might actually start a podcast but how do you know who your listeners are? iTunes doesn’t give you those. You could write a book. Well, Amazon doesn’t give you though all the readers, like how do you know you can’t engage with them right? So, in other words, the solution to this problem is you need to capture people’s email addresses. That’s the key things you have to keep it. Now you can have, I can do is things on Facebook. Well, Facebook right now recently is like cracking down on anything happen to real estate and did you know that starting on about two years ago when you post something on your Facebook page, like only 1% of your followers actually ever see it unless you pay for it like it’s that. So, you can’t actually reach your followers. You get five thousand, ten thousand, who cares? You can only reach those people unless you pay for them and not only that but you’re at the whim of whatever social platform you’re on. So, the key really is email. The oldest traditional way of reaching people. The only way to do that is to capture emails so that and this is the heart of the platform. The heart of the platform is really consisting of a way to capture a website visitor to your website and they need a compelling reason to force to go on there but to give you their email address. Why would they give you your email address? Now, when you go to syndicators websites, like 98% of them have nothing on there except a nice little pretty page, great, great, no capture. Then the other 2% have joined my newsletter like who wants to join a newsletter? I don’t want to join the newsletter, no. What we need is something compelling to give someone to download right? Now Rod, what do you do? what do you, someone got your website
Rod: I was just leaning over so I could hold these up. Okay what I do is I give away books. This book.
Michael: That’s nice
Rod: This book, this book, and my main book the 200-page book that I did. I gave away 20,000 copies of that thing but everybody they got a copy; I got their email address okay. I got their you know their name and so you know and finally I put that thing on Amazon. So, I created you know became a best-seller like yours did and so I created something else that I give now so that can create a relationship with people. And guys, that’s what you’re doing here is your starting and creating a relationship. But you need the framework that Michael is talking about so that you organize this in a fashion where you’re actually capturing their information so that you can create an outreach program and what I call keep them warm and build relationships so that when you need money, you have a database to go to
Michael: Yeah that’s right. So, what you’re saying is you’re giving in something compelling. You’re giving them a book and it could be a hard book like your or it could be a download of something of value right. And so, the step number two, we skipped step number one, like it’s really capture. You want to capture the email. Now step number one is attract and attract has to do with your brand right. So, if you’re, let’s say a doctor and you decide that you want to raise money from other doctors well you’re probably gonna write something some we’ll call it a lead magnet something of value that speaks to doctors. It could be something a, hey how to not burn out in your job, how to enjoy your job again, or retire early or something like that right. It doesn’t even have to have real estate investing in there. Someone goes on that goes, oh my gosh I don’t know I want to retire early, how do I do that? I’ll give you my email for that thing and so now you’ve captured. So, attracting is really has to do with your brand
Rod: It has to do with the headline. It has to do with the messaging and all of that. It’s you know one that works really well that I got from a guy named Chet Holmes this book called, The Ultimate Sales Machine is use a negative headline like the Five Biggest Mistakes People Make Before They Invest in Multifamily or something. People read negative news which is why you know I don’t watch the news anymore cuz it’s so freakin negative. So, what basically, you are attracting them, you’re calling that attraction okay
Michael: I’m saying any attraction part is, it’s your brand. Its who are you, it’s who are you and a good brand attracts certain people and repels others right. So, you know if you want to be rich, you might be attracted to Grant Cardone because he’s got the Bentley and the jet. If you want financial freedom, you might be attracted to me right and the same thing for you and other people and this is you talk about the scarcity you know mentality and abundance mentality. There’s enough out there because some people resonate with this person to that person. The point is being clear about who you are so you attract the right person and then you’re gonna repel those people. And so that’s the attract part, being clear about who you are and that isn’t evident in your messaging such as the second step is to capture which is talked about. So, the second step is to actually capture the lead when they come to your website. Now, I made this mistake for a long time Rod, is I actually had, well I made several mistakes, I made all these mistakes while I’ve been in the online marketing business for six years now. I didn’t connect the dots between my capital-raising and the online marketing. So, about a year and a half ago we tried to make a deal and we struggled to raise money for this deal. And I was like, what the heck? My list is huge and it is huge but when someone has downloaded my lead magnet, they got a, well thank you for downloading my lead magnet and they never heard from me again right. And so, when we finally came out with a deal, it was like, who’s this guy again right like right. I don’t even I know this guy you know it’s probably in the spam folder at this point. So the second step really is to once you’ve captured is you what I call you want to serve them okay you want to serve your audience and specifically the way you’re serving your audience is typically by educating them and providing value of some sort which in our world is education and content right. So, the serving has a lot to do with regular content production of some sort typically weekly in a variety of formats, video, podcast, blog, email. It doesn’t really matter what but you’re serving your audience. And so, they’re learning from you because you’re adding value to them and they’re also being engaged. So that’s you know and you’re super consistent with all that, let me tell you this, all the large syndicators are doing exactly what I’m just describing what you’re doing what I’m doing and there’s all the other people doing that as well. And you’re super consistent with creating content
Rod: Yeah even if I’m sick, I’m out there you know like you
Michael: The average syndicators like yeah, I don’t have the time for that
Rod: So do you have a solution for the average syndicator or you just need here to kick him in the butt and say you know if you want this, you got to be consistent? So, what’s your spin on this?
Michael: Yeah, I’m gonna do, I mean yeah, I mean right now I’m kicking him in a butt right. I like, with everything Rod, you would agree with that everything’s a mindset thing you know the how is always a secondary detail once you get acknowledgment but it’s you know so many people are producing content a regular basis that everyone can do it. It’s just literally a mindset thing. It’s a mindset thing and I will tell you, when you see, I’ll tell you the end goal and you’ve seen it your first hand yourself when you put out a deal and you do a live webinar which comes at the very tail end of what I’m talking about here and you put out a deal and you do an email, three email blasts to a live webinar and you sound the recording and then you call for soft commits and all of a sudden before you know it there’s seven million dollars in a bank four days later you’re like, yeah you’re like holy cow, yeah and why is that? It’s because of the platform. It’s because the trust that you build with people you’ve possibly, well first of all you haven’t met before but you nurture them and you have conversations with them and they feel and rightly so that they know and trust you because you’ve spoken to them every single week for the last three, four, or five months. And so, you’re building, you’re serving your audience but you’re also inherently building trust and that leads you, gives you the right to go to step four which is to lead
Rod: Well hold on hold on hold on. Listen, wait on step four one second. I want to hammer home something because step three is the biggest. Well, not the biggest but a huge piece of this guy’s and so don’t, if you want this, and I know you do, if you want this, then you must be consistent. So, there’s two things that when you’re building this brand and you’re building and you’re nurturing these people that have taken the time to raise their hand and say yeah send me what you have, you’ve got to be consistent with your communication with them. And this is where most people fail. So, there’s two keys here. One is add value. Second is consistency. And that applies to any medium that you’re going to use to not only build reach but to nurture the people that get into your tribe. So, like if you’re gonna use a social media platform like a podcast, like a YouTube channel, like a Facebook group, like a LinkedIn, Instagram, whatever. The two keys there are add value and be consistent when they get into your funnel, it’s the same freaking keys. Now, do you have to write all the content? No, you can curate content and send them articles and say, hey I thought you might find this interesting. So, it doesn’t have to be brutal but you have to stay in front of them. Would you agree with what I just said?
Michael: No, I totally agree and this is an area where people are a bit hazy on. So maybe let’s talk about let’s talk about that like you know the key is that consistent in creating content. One of the biggest challenges people have and first as well, what should I talk about? And here’s some solutions to this problem. The best source of what you should talk about, write about, or whatever is from your potential investors from your audience right because they will ask you stupid questions. Well what’s the investment process like? How long does it take? How much money can I make? What are the risks? How to invest with an IRA? What is their market outlook? So, they’re asking all these “stupid questions” and you’re getting them all the time from investors. Well there’s your blog post topics right there and then you know if you run out of stuff then you can do what you know other thing is curating it. There are other, what’s Rod putting out? Let me gonna get some idea from Rod
Rod: Yeah definitely want to see what he’s putting out
Michael: Oh, he just wrote about you know the coronavirus and how it’s gonna be great for multi-family syndicators. Well you know maybe there’s are some great ideas from other syndicators you know but barely paying attention to emails that you’re getting from your audience on Facebook
Rod: You could do a Google Alert on whatever market/sub-market that you’re interested in and anytime something positive gets thrown out there in the media, you send that you know
Michael: That’s great. it doesn’t really take much. I think the point is just committing to it and the other so, that’s a big one is, oh my gosh what should I write or talk about? And the other one is well how do I do it? I’m not a writer. I don’t like the way I look on video right like okay so here’s my solution to this, if you love the write, then write. Just write and then you can literally use it as a script to record a video like that’s easy or if you don’t like the write, you can record a video and then get it transcribed with you know solutions like tammy.com
Rod: Otter on your phone. It’ll just transcribe it in a sec
Michael: Transcribe it and then you can either edit it yourself or you can have someone edit it for you but a lot of time the problem with writing as you know sometimes you’re staring a blank page you’re like, what should I write about? What should I write about? And so when you speak into your phone or you record a video and you transcribe it you’re no longer dealing with a blank page now you’re in editing mode and it’s relatively easy now to put out content and the other mistake people make, we confuse things a lot, I’m gonna make sure you SEO and use the headlines and bolts but at the end of the day the reason people don’t do it is they feel like the standard is so high they want to be perfectionist and they don’t do it. So, my advice is to you is just get something out there. Everyone, I mean I am sure you laugh at your own content from like a year ago. I do. I’m like oh my gosh look at that look at that camera I was losing my goodness gracious or you know whatever and you it doesn’t matter right. The point is that you do the best you can but you do not strive for perfection because if you do that, you never get anything out
Rod: Well listen. Let’s be real. If you’re striving for perfection and you’re fearful and you’re using that as an excuse frankly and you know this, those of you that do this know who you are and in bottom line is you just have to take action and you know yeah if I look at my first videos I did, good God, I’m like, oh my look at that, look at that moron there. I was like holy cow, it’s embarrassing but you just do it and then you get better as you do it and you get better and you get better and you get better and the fear goes away. You just got to take that first step. Now, I can’t stress enough the commitment component here that Michaels talking about, don’t do it unless you’re committed to sticking with it, critical. Alright so what are some, well you talked about some of the mistakes. So, let’s talk about the right way to build what you’re calling a platform
Michael: Yeah well the first one, the first the right way is to build in the right sequence and what I see most people doing is they start with my fifth step which is promote. They’re promoting themselves. They actually get on someone’s podcast they maybe get on yours or mine and then they stay you know at the end they shout out their website and I go to a website and it’s like nothing there and the other thing I explain to people when someone has you on your podcast, they’re not gonna have you back for at least 12 months right there’s no way so you kind of blew it. You got your name out there and now all it’s someone you actually got someone so interested they went to your website and you don’t even know who they were, what a shame. So, in other words people are promoting themselves or they go to meetups or they’re promoting themselves before they have this platform built because it’s not just enough to capture a lead. You actually have to serve them like we talked about which implies a certain technical infrastructure and a commitment to producing content. And behind the scenes you can automate a lot of those things using a variety of different technology platforms that when someone actually downloads your lead magnet, there is an automatic series of emails I could trigger for example. It’s like your welcoming someone, same thing when you’re in the 4-step which when you’re leading someone. So when you’re serving someone you earn the right to lead them somewhere like in the beginning Rod, if I tell them he gained a couple pounds and you maybe shouldn’t you should lop off some you’re like who the hell are you right but if I have a relationship with you and I’ve served you, provided value. I can probably sit and make some suggestion here like that’s pretty good yeah you’re right about that. And so, the same thing here, at one point where you want to lead them to something and it could be in a platform, it could be anything, it could be to buy a book or do something or take some in action. In our case, in the syndication, the call to action is invest in my deal. That’s the call to action. So when I do have a deal, then at that point I am now leading them to a path of investing in multifamily because we all believe that investing in stocks is a dumbest thing ever and so we are serving our audience, we’re educating audience about alternatives to that, and at one point we want to lead them down that road and that’s the fourth step where we earned that right and people kind of go wow this is great and they consider investing with you. And so, all that stuff can be automated. So, the emails that are being put out, a lot of stuff can be automated. So, we have this core platform in place okay. We’ve talked about the capturing, the serving through content, and then the webinars and the soft commit automation is that process can be automated and the last step now is the promotion part okay. The last step is a promotion part and now you can get on people’s podcasts right because if I get on your podcast I can say you know I’m at so-and-so and I got this fantastic eBook or special report that your audience would really like and it’s available at blah. And now people can go well I’m gonna check out the special report and now I have the ability to capture leads right and you do that very well and we try to do is very well. Every time they’re speaking in front of a meet-up you say hey if you want to find out more about investing in the multifamily syndications, check out my special report at you know xyz.com, people go they write it down you know and so now your biggest problem at this point becomes putting enough leads into the funnel because what happens is when they go through the funnel, they download this lead magnet, they get on your automations you’re welcome, and in our case our call to action is to join our club okay. So you download the lead magnet hey you know we can’t present you with deals right now because I don’t know who the heck you are but why don’t you join our investment club in order for do that, we have to actually have a phone call with you and so click the button so you can schedule a call with us. And if you don’t click the button then we’ve chased you a little bit and then we stopped chasing you and then when you get an email article then at the bottom it says oh, we noticed you haven’t schedule a call with us that schedule… I can’t show you a deal. And so, what happens is our Investor Relations guy, they wake up and they just have four investor calls that day and it happened automatically because it’s integrated with Calendly. So, these automations, in other words the syndicator’s experience is because essentially one of order-taker. As long as you’re putting out consistent content, all these automations are essentially automatic and so when you have a live deal you then send the deal to those people you’ve only had conversations with and you can tag them and the whatever CRM system you’re using, you use Active Campaign, you might be using something else but you tag those people and I call them deal ready. These are people that are quote deal ready they’ve jumped who are hoops and I can now present them with a live deal. And so now I can blast to that list of deal ready and that list keeps growing every single day, every single week. So, when I have a live deal you know all of a sudden and I call for soft commits. I have millions within days and it’s stunning. It really is stunning and that is how you can 10x your current capital raise
Rod: Do you, just as a quick aside, do you do 506 B mostly or 506 C?
Michael: Yeah, we do mostly, if not all, 506 B
Rod: B okay so with that guys, that’s the SEC exemption where you actually have to have a relationship so that’s why he’s saying we have to have a phone call with you we have to get to know you probably more than one call with you because we have to have a substantive understanding of your financial situation and so versus a 506 C which is what we do where you have to be accredited so that we can actually market deals. So that’s the difference there. So, I know that you’ve got an actual product that you’ve put together here Michael relating to this platform that people can utilize to set up this lead attraction capture presentation model, how can people get access to that?
Michael: Yeah, it’s actually a free on-demand training. It’s at theMichaelBlank.com/platform and it’s a recorded training I did. And it kind of goes deeper on the elements of the platform and I even show you some of the technical elements that we use. I find that a lot of syndicators are you know afraid of tech and I just show them a few things and like, man, anyone can do this and I just kind of really show the order with which we build them and how to do that and then the results. I’m just going a little deeper do some screen shares about 30 minutes so it’s at theMichaelBlank.com/platform.
Michael: You know if people give us feedback that they want to go deeper then we’ll figure out what to do with that but I’m really
Rod: So guys, what’s he doing here? What’s he doing here? He’s getting leads okay. So, he’s doing exactly what he’s telling you to do which is get leads for investors. Now you know Michael’s got an educational platform and then you know this is filling that funnel. So, here’s a perfect example of what we’re talking about here and of course I use books. I go on podcast and I have a free download or whatever and that’s how this, and it’s the same thing with investors and so you know like you know I have I have a booklet the you know the questions that a limited partner should ask a general partner and other things like that that’ll add value to prospective passive investors. And that’s how this this online game is one. So awesome, was there a question I didn’t ask you about this buddy?
Michael: I don’t know I think we cover pretty thoroughly
Rod: Yeah, I think so too
Michael: I didn’t discover this until like I said fairly recent. And again, it’s amazing I’ve been doing this online thing it for a while but even I really did not connect them online marketing with the capital-raising real estate side. I always thought they’re completely separate maybe possibly synergistic businesses but you know I’m getting better at it but you know Grant Cardone is like the master of this.
Rod: Well sure
Michael: He’s figure it out his entire marketing is around raising capital. Everything he does is Grant Cardone,
Rod: Yeah 10x, I heard it was all about raising capital. I’m not sure
Michael: You know and he’s figured it out and I was, I probably, I didn’t click on my head until like 18 months ago which is pretty slow for being involved in this thing and I just saw other people kind of they’re outperforming us. I’m like, huh, wonder why? Is it because I wasn’t doing anything that I was describing on the capital raise side?
Rod: No, I love it you know we’ve been blessed just because you know my podcast has been so well received that you know literally, I can put it on the podcast and have you know our dance card fold. We raised eight million in about 5 days you know just a couple weeks ago but you know those of you that are you know getting going in this, you want to raise money, you want to raise more money, you absolutely need some sort of a lead generation system that Michael’s calling a platform so that you can keep the list warm. Well listen brother I appreciate you adding value. Guys, check out his thing at theMichaelBlank.com/platform and it’s great to spend a little bit of time with you my friend
Michael: It was great idea Rod. Thanks for having me.
Rod: Take care