Real Estate Investors Want to Hear Your Story, Not Your Data
By Adam Gower Ph.D.
When you’re reaching out to new investors, accredited or not, you need the right approach to get them interested in what you’re offering. It’s tempting to lead with projected internal rates of return, returns on investment, market comparisons, and other data that makes your project look good.
But, if you really want to drive decision-making and attract interest, you need to lead with your story instead of your data.
How We Make Decisions
As much as we like to think we make decisions based on data and logical evidence, the majority of our decision-making still revolves around our gut feeling, emotions, and similar subconscious processes. Evidence may play into our decisions, but we always start with emotion.
Before we had access to great data, all we had were stories. You can develop impressions about a project and learn what’s under the surface through the stories the people representing that project tell you. The numbers can increase interest, but by themselves they’re unlikely to be convincing enough to make an investor buy in. What brings buy-in? The right stories.
Data Vs. Anecdotes
Data is a great resource for your business. You can use it to drive many different internal decisions and to back up your external case with evidence. It plays a huge role in your marketing and outreach, but by itself data is nothing but a collection of numbers.
Anecdotal stories give context to data. Stories from your own experience or from the company’s experience show what’s happening around the numbers and demonstrate that you have the competence to interpret the numbers, read the market, and drive your project to success.
Put yourself in the shoes of your investors. What’s going to drive you to put money into one real estate project over another? Would slightly better numbers convince you, or would you be more convinced by a project sponsor who can tell you all about how they successfully navigated out of a tricky economic issue with their last project? Anecdotes and personal stories earn more trust than numbers, and trust wins investors in the end.
Selling with Your Story
Using your story doesn’t mean it’s time to hop on social media and tell the whole world about your most embarrassing failure or show off all your success stories. You don’t have to go and expose everything about your life or your company to the public eye.
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Using your story means rearranging your communications to put emphasis on story elements first before anything else. Lead with your story, draw your investors in, then back up your claims with data evidence. When you start to tell a story, people automatically lean in without realizing it. At some point when you start to make claims or narrate your opinions, you’ll use the data as evidence to back up your statements. The data won’t be convincing on its own; it makes a strong impact when it’s woven into a story.
People aren’t as interested in hearing about your resume or your company’s record and CV. They want to learn what’s under the surface and find out if they can trust you or not. A CV, investment record, and any set of data won’t tell an investor whether they can trust you to keep their money safe, let alone if you can grow it as promised. A well-timed, appropriate story builds up a sense of trust that’s irreplaceable when you’re trying to sell an investment opportunity.
There are hundreds of opportunities to invest in real estate. What sets you apart from your competitors? Your story. Data speaks, but stories speak louder and give context to data that makes it more appealing and ultimately more convincing. Paint the right picture in the minds of your prospective investors and you’re already on the road to earning their trust, and their capital.
Copyright 2019 - ADAM GOWER PH.D. - All Rights Reserved