6 STRATEGIC WAYS TO SCALE UP DEAL FLOW IN APARTMENT PROPERTY INVESTING

What is Deal Flow?

Deal flow means the creation and maintenance of a flow of business proposals for evaluation and decisions for financial backing. Deal flows are the rates at which investors are receiving funding requests and business proposals from startups. It’s an economic indicator as a qualitative measurement versus a quantitative one. Investors use deal flows to help them manage their pipeline while still focusing on current deals. For real estate professionals, Deal Flow centralizes transaction management, providing a single platform to launch and track listings from start to finish, including listing interactions and reporting.

 

6 Ways to Scale Deals and Build Deal Flow

1. Deal Sourcing

This is the broadest scope. Here, you may need to take an active role in uncovering potential opportunities. Leverage your network and get busy on platforms. This stage in the deal flow process is broadly referred to as deal sourcing or deal origination. This is the process of finding appropriate leads and bringing them to your company’s attention. You traditionally source deals through personal networks and referrals, although more dealmakers are also utilizing direct deal sourcing tactics.

 

2. Screening / Setting Criteria

At this stage, creating some criteria to begin preliminary eliminations is important. You’ll just need some measures to start maneuvering through potentially hundreds of investments. The goal is to collect specific information that will help the firm determine whether the company is a good investment fit. At this point, a company is also assigned a dedicated lead or point of contact at the firm. This could be simple valuation analyses, customer engagement assessments, or determining what ideas you actually support.

 

3. Track investments with intelligent CRM platforms

Intelligent CRM platform systems driven by relationship intelligence and automation are changing the way deal flows and closing opportunities are managed. Intelligent CRM platforms are built to provide deep insights into your team’s institutional memory and deal management.  Relationship intelligence on its own, relationship intelligence is the insight into your team’s network, business relationships, and customer interactions that helps you find, manage, and close deals.

 

4. Grasp Powerful Data-Driven Analytics

Getting insights into the data and feasibility of an investment is imperative and gathering such data could take time with the use of Excel and other technological tools. The technology that enables the CRM to provide these insights is the result of several key features. This means you have all of the information you need to manage investment opportunities, fund information, and due diligence processes. Additionally, built-in business intelligence makes reporting and analytics easier, so your team can always make data-driven decisions quickly.

 

5. Refining Deal Workflows and Seeking Referrals from Service Providers

Your team can be assigned new tasks, which are auto-assigned to them through role-based templates. Organized workflows are faster and they help the team make informed data-driven decisions. Connecting with service providers such as lawyers, banks, brokers, accountants, other sales professionals, consultants, etc can be helpful to know if you’re an active investor looking for deals. One good way to kick off conversations and maintain communication is by asking questions on deals your contact recently closed or following up on the status of their current deals.

 

6. Increasing Your online engagement and Using a Cloud-Based Platform to Manage Deals

Showcase your expertise and what kinds of deals you’re looking for by publishing blog posts or LinkedIn articles, hosting a podcast, developing a social media presence, hosting webinar panels, or sending out a useful newsletter on a topic related to your investment thesis. Also using Cloud-based platforms help to keep your data safe and out of the risk of losing important information. Being active on these platforms, posting about what you’re looking to invest in, and connecting with new people can lead to increasing venture capital deal flow and adding even more potential opportunities to your CRM tool.

 

Ways of Sourcing Good Deal Flow in Commercial Real Estate

• Forming Relationships / Networking

Attending as many shows and talking to as many people as possible helps to build your network and make meaningful connections. Technology makes it easier than ever to engage in digital communities and identify local events related to your investment niche. Some ideas include: Answering questions on social media, Quora, Reddit, and other platforms helps nurture your local community while building long-term relationships. Serve as a speaker or judge at the business pitch and accelerator events. Be a mentor for local startups or function as an advisor to private businesses. Go to launch events, attend tech happy hours, and volunteer.

 

• Develop Proprietary Market Insights

One of the best ways to attract startup interest is to generate proprietary market insights and projections. Sharing your unique perspective and experience through various sector-specific publications is sure to garner media attention and help build buzz around your firm. Startups will take note and have your firm top of mind once they’re ready to seek capital or make a referral. Startups today are looking for investors that can offer deep domain expertise, proprietary market intelligence, and helpful resources that will help them grow faster than the competition.

 

• Invest in Deal Flow Management Tools

Once you’ve increased your deal flows, you need a way to manage the information generated over the course of the entire deal flow process. This includes founder contact details, company data like industry and number of employees, and relationship information like which process stage a particular company is in. The best way to do this is to utilize a customer relationship management (CRM) platform that organizes data, tracks metrics, and progress, and aggregates your information in one convenient space. With CRM you can avoid the mistakes, missed deadlines, and lost deals that can occur when details are spread across spreadsheets, notepads, and email.

 

 

CONCLUSION

Scaling your deal flow pipeline requires major investments at both the top and bottom of the funnel. The quality of your network will determine the quality and volume of your leads, so it’s important to go above and beyond to create new, impactful relationships wherever possible. 

Going out to the newest industry event, carving out a clear brand for yourself online, and digging deep into your existing network can all help improve your deal sourcing. Organized deal flow data empowers you to more easily evaluate and scale your current tactics so you can close quality deals faster.

 

As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.