The Complete Guide to Using Social Media to Raise Private Finance for Property Investors
In its simplest form, investing in property consists of two steps. The first step is to find a property to invest in, and the second is to have the cash to buy it. With house prices being at an all-time high, it’s no surprise that most people struggle with the latter.
This is why raising private finance is a growing trend in the industry. Leveraging other people’s cash allows you to scale your portfolio without investing all your capital and running out of money.
But who will invest in you, and where can you find them? Well, with close to 60% of the world’s population being on social media, we believe these online platforms are the best place to start.
This blog is the ultimate guide to leveraging social media to raise private finance. After reading this, you will have the tools and strategies you need to attract a stream of investors who will fund your projects. You’ll be ahead of your competition and on the path to reaping huge wealth through property investment.
What is raising private finance and how does it work?
‘Raising private finance’ is the formal term for borrowing money from other people. The person who lends you money can be anyone, from a family member to a high-net-worth business owner.
The way that people raise private finance varies. Typically, the process works as follows: An individual-referred to as ‘the investor’-will lend you cash. This can be enough to buy an investment property, or it might be a smaller amount that funds the refurbishment or deposit.
The investor will lend you this money for a set period, normally a year. You then agree to pay the investor back their money on the pre-agreed date plus interest. The interest rate is agreed between you and the investor.
Some investors are happy with a lower interest rate, so long as it beats the banks, while other investors want more. Depending on the deal, you might have one investor putting all the money in, or several investors investing small amounts.
How can social media be leveraged to attract investors?
To raise private finance, you first need to attract people with money. Thankfully, due to our modern age, we have a powerful tool called ‘social media’ that allows you to talk to almost anyone anywhere in the world.
4.8 billion people use social media. This makes it a massive platform for getting yourself in front of people on a global level. Just think about how many influencers make money simply by existing online and building a personal brand (more of this later in the article).
It’s easy to think of social media as people posting pictures of their food, or kids dancing on TikTok. However, once you realize that over half the world’s population use it, you soon realize that there are a lot of people with a lot of money scrolling Instagram.
Finding your investor – Building an avatar
Before you start posting relentlessly to every social media channel, it’s important that you figure out who you want to attract.
For example, do you want to target high-net-worth business owners who have six to seven figures in the bank? Yes, they have more money to invest, but they’re usually more experienced and have stricter criteria, especially if they’re investing in someone with limited experience.
If this isn’t appealing, then do you want employees with high-paying jobs who have no idea how to invest? Think of doctors, for example. These people may be more appreciative of your expertise, but they might not have as much capital at hand.
Figuring out your ‘customer avatar’-the person you want to target- is essential to knowing two things:
- What social media platform you should use
- What content you should create
Social media demographics – Who’s using what?
Below is a list of the popular social media platforms, and the demographics that use them. This should give you a clearer idea of where your target investor is ‘hanging out’, and what kind of content (like short-form videos or articles) works best on these sites. If you’re just starting, then pick two platforms and build a consistent presence on them.
Facebook: Facebook has changed from the light and bubbly platform it used to be. It now holds an older demographic than before, but it’s still informal and ‘unprofessional’. Long-form text tends not to do as well here as it does on other platforms, like LinkedIn. Instead, try to stick to short videos and posts. Being engaging is crucial.
If you’re looking for amateur investors or people of intermediate experience, then this is a worthwhile platform to use.
LinkedIn: In contrast to Facebook and its informal tone, LinkedIn was built for professionals. It’s a platform mainly used by business owners and people who hold senior roles in organisations.
LinkedIn has taken a slightly more unprofessional approach in recent times, with dog pictures and posts about personal life becoming more acceptable. Long-form content, articles and organic images tend to work better here. Keep the tone light, but avoid being as informal as you would on Facebook or Instagram.
Instagram: Unlike LinkedIn, Instagram is a hub for younger generations. But that being said, many popular property investors have raised a lot of money using this platform. Instagram kind of became what Facebook used to be, but now it’s gone more along the lines of TikTok, where short-form videos and reels gain the most traction. If you master Instagram, then you can gain tens of thousands of followers, if not more.
TikTok: There is the stereotype that TikTok is only for ‘GenZ’. While GenZ is its most popular demographic, it’s worth noting that TikTok is one of the fastest-growing social media platforms, and businesses are using it to great success. And, because it’s relatively new, there is less competition on here, especially since much of the older generation don’t know how to use it.
Mastering the art of the ‘reel’ and being able to provide as much information in as short a time as possible is the key to TikTok success. If you’re targeting individuals who are starting their investment journey and have capital to invest but lack direction, TikTok could be an ideal platform for you.
X (Twitter): X is a company that is continuously changing (as you can see from the rebrand). So, this one is a little trickier, and you’ll need to keep up to date with it. X is mostly popular among older demographics and is predominately used by business owners, professionals, journalists and celebrities. It’s much more niche than the other platforms and is less understood.
If you’re looking for business owners and wealthy individuals, then X is worth investing your time in. Try to keep your posts short and engaging. Use visuals where possible, like images and short videos.
Social media platforms can change, and this is a general overview of each one. There are exceptions to the rule, so try new content and see what goes down well with your audience. You might find that the people who follow you react differently.
Personal brand and messaging
You don’t need to be Coca-Cola to have a recognisable brand. All you need is a smartphone and access to social platforms. No big investment, like paying for a flashy logo, is needed.
Whereas a standard brand relates to a business, your personal brand is all about you. Who are you? What do you do? What do you stand for? Are you formal and authoritative, or are you funny and approachable?
There is no right or wrong answer. The key is to create a personal brand that will relate to your target investor. If you want to attract high-net-worths, then being corporate, straight talking and facts-driven will be more appealing to them. Amateur investors might prefer a more approachable and relatable personality.
The key to personal branding is to make sure every post and video has a touch of you. Be authentic in everything you say. Let your personality shine through. Most importantly, be consistent. Always share the same message (like transparency being important) and embed it into your copy, images and videos. Personal branding takes time, and you need people to know, like and trust you, so stick with it!
Creating content that attracts investors
You, like most people, have probably sat at your desk, keen to do your daily social media post, just to stare blankly at your phone screen for 30 minutes, wondering what to put. It’s natural. With so much content whizzing around out there, how do you create something that people want to see?
The two words to always bear in mind are ‘authentic’ and ‘value’. So long as you are being authentic, you’re growing your personal brand. So long as you are providing value (like sharing important information or educating people) then you are providing content people want to see.
Go back to your customer avatar. Does your investor want to see photos that provide credibility, like you at events or you working on projects? If you are looking to attract people with money but no experience, then they might prefer to be educated, which will help them see you as an authoritative and trustworthy figure.
Always be honest and do everything you can to demonstrate your credibility. If you get stuck and you don’t know what to post, then document your journey. Show people what you’re doing today and what you’re working on. You never know who is watching.
Leverage existing groups
You don’t need to reinvent the wheel to get eyeballs on your posts. Platforms like LinkedIn and Facebook already have groups on them that contain thousands of people. There are property investment groups, business groups, community groups and groups for people who share similar hobbies and interests.
Finding online communities like this and regularly posting in them is useful for getting your message in front of more people during the early days when you only have a few hundred users following your account.
Pick groups that will be of interest to your target audience (like investment groups) and start posting videos regularly. It’s always good to do an introduction video first. This should be a minute or two long and give people a brief explanation of who you are and what you do. Just check the group rules first to make sure you stay between the guidelines. As an example, some groups don’t like you ‘selling’ or promoting your services.
Abide by FCA Rules and Regulations
The Financial Conduct Authority (FCA) are in charge of regulating the financial market. Investments fall under this, meaning that there are certain rules you must follow when raising finance. For example, you can’t pitch an investment opportunity to a room full of strangers or promote it online.
You don’t need to know the handbook by heart, but it’s vital that you’re aware of your moral and legal duties. If you’re caught breaking FCA regulations, then you can face a hefty fine, and in some cases, a prison sentence.
You can discover more about FCA regulations by clicking here
Join our growing community for all things property
We hope that our article has proved that you don’t need to be a social media guru to get started. As with all things in life, it takes practice, and a lot of testing. Eventually, you’ll find a rhythm of what content your audience responds to.
Stay consistent and don’t be disheartened in the early days. Once you crack the code, you’ll have investors lining up at your door, ready to work with you.
This article is just the tip of the iceberg when it comes to the useful content we create for investors. We have a whole community of like-minded people who share their own advice and insights, from finance experts to popular property publications. The best part is, that it’s completely free.
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