I was speaking with a group of new investors last week when one of them confidently repeated advice they’d heard from a “guru”: “If you find a great deal, the money will find you.”
I took a deep breath. Should I burst their bubble or let them learn the hard way?
How Raising Capital Actually Works…
Look, there’s a bit of truth to that saying. Great deals ARE easier to fund than average ones, but this oversimplified advice has led countless new investors down a frustrating path.
Here’s what really happens behind the scenes when successful multifamily investors raise capital:
The moment we find an amazing deal, we’re not scrambling to find investors. We’re calling people who’ve known us for 6–18 months, who’ve been following the deals we’ve closed and already trust our judgment.
Why? Because even with the most incredible numbers on paper, investors won’t write $50K+ checks to people they barely know, operating in markets they don’t understand, with teams they’ve never vetted.
No purchase price or projected returns is going to make them feel comfortable investing in that deal.
Investors need to be diligently building relationships before finding a deal..
The most successful multifamily investors are consistently building relationships EVERY SINGLE DAY through:
- Consistent content creation that demonstrates expertise
- Regular email communication (like this one!)
- Podcast episodes that showcase their thinking process
- Networking events where they connect face-to-face
This isn’t the sexy part of real estate investing. There’s no “hack” or shortcut. It’s showing up day after day, providing value, and building trust.
So, What’s The Approach That Actually Works?
When we find a deal, our investors aren’t primarily investing in the property. They’re investing in US. They trust that we’ve done our homework, that we know the market inside out, and that we can execute the business plan.
This completely flips the conventional wisdom on its head. Instead of:
“Find deal → Scramble to raise money → Probably fail”
It Becomes
“Build investor relationships → Find deal → Present to ready investors → Close successfully”
The important note is that multifamily investors need to be consistently raising capital all the time. When I say raising capital, I don’t mean actually collecting investment dollars from investors, but building relationships with potential investors.
This way, when they do find a deal, they have a roster of investors who are comfortable with who they are and are actually ready and willing to invest in that deal.