Capital raising is a constant grind for many private mortgage originators (“Lenders”). Whether they target mortgage investors for individual trust deeds or a mortgage fund, many tell me the most challenging part of the process is generating investor leads. After the initial contact, it’s just a matter of building a relationship with the investor until they are ready to deploy their capital.
While lenders still need to work hard to seek new mortgage investors, it could be so much easier if it were the other way around. Many investors search online to find companies to invest with, but most lenders do a poor job presenting their investment offering to the public. Here are a few options for generating “inbound” investor leads with a low budget.
Create a Separate Website
I have seen so many lender websites with one basic page for capital raising. While it’s relatively easy to add one “invest” page to your existing website, I recommend building a separate website to focus on the investment offering. Keep your primary site focused on loan origination. Simply add a link to the new investment website, which should have a separate domain name — XYZlending.com for origination and XYZmortgagefund.com (or XYZtrustdeed.com) for capital raising.
It’s more impactful to direct potential mortgage investors to a website where they are not distracted by content that is not relevant to their needs. The site doesn’t have to be too elaborate, but I recommend including the following pages or sections:
• Benefits of Investing
Tell investors what’s in it for them. What’s the average return? What’s the risk profile? Do you service the loans in-house or outsource? What happens if a loan defaults?
• Lending Guidelines
Tell investors about the types of loans their money will be funding: geographic areas, LTV, LTC, credit requirements, etc. Be transparent about the origination fee you charge to borrowers, even if your investors don’t get any of it.
• Track Record
Brag about all the loans you’ve originated in the past and the overall performance. Disclose how many loans have defaulted. List every single loan you’ve ever closed with the following details: city/state, property type, loan type, loan amount, LTV, funding date. If you don’t have photos, a list format will be sufficient.
Whether you’re raising capital for a fund or individual deals, the mortgage investor needs to know you and trust you. Talk about the company’s history, accomplishments, the team, company culture, and show photos of everyone in the company. Show pictures of your office and encourage investors to visit.
Ask existing clients to write up a testimonial about their experience investing with you. Get five at the very least to start, and 15-20 would be a good target. Get more testimonials from newer investors after they’ve invested for some time.
• Performance Reports
I recommend publishing your quarterly or annual reports to offer full transparency about your portfolio’s performance. The reports are a great marketing piece that may help attract new investors. This suggestion mainly applies to fund managers, but it could also apply to originators who broker loans and retain the servicing.
Design a pitch deck with all the same information included on your investment website. Offer to send it to potential mortgage investors if they fill out a short form on the website.
Produce high-quality videos to promote the investment opportunity. The company principal(s) should be talking to the camera; don’t even think about making an animated cartoon video. A quality video will give your company credibility and help build trust before, or without, meeting in person. These videos should live on YouTube, optimized for searches.
List your company on websites that offer a platform to promote mortgage investment opportunities. These sites typically already have an investor audience and good SEO for inbound traffic, which you can leverage.