This is a guest blog post by Rayaan Arif, CEO at FundingTree. Don’t miss Rayaan’s panel discussion:
? 12/08/2016 1:00 pm
Panel Discussion “Real Estate Crowdfunding“
In the race to find Commercial Real Estate Investors, it may seem like you are swimming against the tide or worse still, drowning in a sea of marketing channels. Rest assured the Principles at FundingTree understand your challenges.
Unless you have been living under a rock, the terms “Crowdfunding” and “Accredited Investors” are becoming widely known although not easily understood since they are relatively new.
A quick search on Google for these terms revealed 929,000 people also searched for the term “accredited investor”. The term “crowdfunding” was searched 32 Million times.
Why is this happening?
So why all of sudden is this becoming such a hot topic. The birth of this popularity can be traced back to “The JOBS Act” (searched 34 Millions times on google).
The Jumpstart Our Business Startups Act or JOBS Act, is a law intended to encourage funding of United States small businesses by easing various securities regulations. It passed with bipartisan support, and was signed into law by President Barack Obama on April 5, 2012.
A Different Approach
First and foremost, we are marketers, with first hand knowledge and expertise in Commercial Real Estate investments and technology. Much has been made of the role of technology in creating an “online marketplace” for people to simply find, review and invest at the click of a button.
Having watched the early adopters place a strong emphasis and a tremendous amount of venture capital into crowdfunding platforms and technology, we took a different approach, placing a greater importance on marketing intelligence and directly engaging with the human element.
Teri Thompson is our Chief Marketing Officer, an Adjunct Professor and a social media marketing expert. Having written and spoken on the subject since 2001, She has watched how the general market has evolved into social media and digital awareness from ignoring to adoption based on fear of the competition. Marketing based on fear is not ever a good idea. However, that is exactly what motivates a preponderance of commercial real estate developers when finding the perfect investor.
A more positive and constructive approach is to “meet them where they are.” This open, positive interactive strategy shifts the model from being a hunter to collaborator. It is especially true when engaging “Digital Natives”, or those under 35 years of age as first described by Mark Prensky of Harvard in his breakthrough paper “Digital Natives. Digital Immigrants” 2001. Based on my own research and experience with MBA students and clients, his premise is true. There is a divide around 35 – 37 years of age. Those younger than 35 grew up with the internet and computers, are the most highly educated generation in the world as well as the most traveled. They consume media online and expect immediate access to information. They are high users of social media where they exchange information about everything, including real estate opportunities.
The traditional push method of bombarding potential investors with the merits of a project fall on deaf ears with Digital Natives. Hard selling makes them run the other way. They trust their peers and family most in person or online where “conversation is currency”. It only takes a recommendation from one influencer in their lives to motivate an investment decision. There is also a paradox with this group. They are open and take risks about many areas but not their investments. After all, they have been weathered by the 2000 tech bubble and the 2008 Great Recession.
Being a marketer is very similar to the role as a therapist. To be effective requires listening, patience then communicating in a way that the receiver will hear the message in a way that is important to them. This is where most real estate marketers fall short but where FundingTree excels. We flip the process into one of deep listening to the 2nd and 3rd layers that goes beyond identifying a superficial customer “persona”. Digital Natives are greatly nuanced and cannot be put into a bucket. Another paradox is they are highly individualistic within the herd of their social networks. One size does not fit all. This is why effective social media and digital marketing to the new face of real estate investors takes time. However, those who are willing to commit and engage with what is now the largest population around the world, also known as the “youth bulge”, will be setting up their projects for loyal investors now and with their families and peers in the decades to come.