Kevin Harrington's 3-Step Plan for Pitching and Winning Real Estate Deals In the new series, 'Funding Faceoff,' Harrington and a panel of experts aim to find out which real estate deals will succeed in the current market and why.
By Cheryl Snapp Conner Edited by Dan Bova
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Despite a real estate market that is currently reeling from price declines and record-high interest, one fact remains clear: Americans are obsessed with houses. We need only scan the plethora of RE-focused media to observe that as a society, our homes are both our havens and one of our favorite forms of investment and achievement of wealth.
Coupled with our hunger for houses is a rapid thirst for competition-style television fueled by shows like Shark Tank, Billion Dollar Buyer, and The Profit.
Related: Watch New Episodes of Entrepreneur Elevator Pitch
A new show, Funding Faceoff, feeds both appetites by giving entrepreneurs who range from newbies to pros the chance to pitch their ideas to experienced investors. In its premier season, original shark Kevin Harrington joins the panel of experts who will react to the RE-themed deals.
The show is the brainchild of RE investment pro Lori Greymont in collaboration with master trainer and coach Adam Leffler. So, what can you learn from a pitch competition on RE investing? In a pre-show interview, Harrington shared his top deal-making hints viewers will be observing in person, both from the show and from his own best and worst experiences in his entrepreneurial past, as follows:
When it comes to deal-making, it's not about you.
"Too many people are so caught up in the passion of their deal, they're caught up in their own heads, thinking 'Anybody is going to do this deal. This is the greatest deal ever,'" Harrington said. "Investors like me are hearing pitches all day in taping, then when we go to eat we're getting pitched during dinner; I was even getting pitched in the taxi cab on my way to the airport." Instead, he advises, think about the recipient, who is busy, who is hearing hundreds of pitches, and develop a strategy. Harrington's favorite is to Tease, Please, and then Seize.
1. First you tease.
"Tease the deal upfront in a way that gets your viewer's attention," Harringon said. "So, Billy Mays, he's selling Oxy Clean," Harrington says. "In six seconds he eats a meatball sandwich and it drips all over his shirt. 'Uh oh. Has that ever happened to you?' So he has your attention."
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In the real estate business, Harrington suggests the tease should look like this: "Instead of showing me how you're gonna buy something, magically transform it and sell it for an amazing profit, show me the before and afters of the projects you've done in the past. If you want attention and credibility, show me some things you've already done."
2, Then you please.
"Show me the details of how you bought a place for $250,000, put $80,000 in, sold it for $800,000 and it looks like it's worth $1 million," Harrington said. "Here's where you've got to please. For example, one of the guys who pitched us, he just offered us interest. Interest? I'm not like the bank. I don't want interest; I want multiples of my investment. 'I'll pay you 5 percent interest?' Just getting a loan would cost today is more than that. So you have to be prepared to make an irresistible offer."
3. Now you seize.
This tip, in my opinion, is Harrington's very best. For every audience, you do your homework, you relate it to the individual(s) you're pitching, and you customize your pitch to succeed at the "seize." So you Google and research the investors you're pitching, you take a look at their personalities and their preferences and the prior deals they've done that they loved, and you use the information to determine who you should be pitching.
"Everybody should be able to find out who their 'judges' are. Look them up. The presenters can Google 'Rotty' (Ryan 'Rotty' Garcilazo), Google my name, find out what I'm interested in." (Additional experts on the new show will also include Mike Hambright, Travis Johnson, Joe Marques (Cowboy Joe) and Jon Nolen.)
"So, for example, you wouldn't pitch Kevin O'Leary on a restaurant deal that's just requiring cash. He'd be interested in a royalty deal. But Barbara Corcoran, she loves restaurant deals."
Related: 6 Skills Every Real Estate Investor Must Master
Harrington even shared a tidbit about one of his own prior mistakes. "I had a public company making some $200 million a year and Carl Icon, the big corporate raider, wanted to buy into the company," he recalled. "And I turned it down because it was too aggressive. He wanted too much, for not enough. So a year later I went back to him with another deal and he said, 'Kevin, what are you wasting my time for, dude?' 'What do you mean?' I said. 'I thought you liked deals. We were talking about deals you liked just a year ago,' to which he replied, ''You've got a startup here. I'm not gonna invest in that. Your other company had $200 million in cash flow'. I hadn't done my due diligence and I had wasted my time. So do the homework.'"
Here are some bonus words of advice for succeeding in the real estate market:
Focus is vital
"Observe everything from the vantage point of learner and student as well as provider and pro," Harrington says. "Small tweaks in the modeling of a deal and during the deal-making process can lead to significantly better results."
Partners are paramount
"Find the ways to optimize both cash in hand and future profit-sharing opportunity, which can produce exponentially bigger returns in the long term," Harrington says. "For example, find the opportunities to pair well-known personalities and influencers with significant platforms with worthy products and ideas in their early stages. This gives the chance to massively accelerate audience acceptance and growth and to generate additional profitability on the upside."
Accept both success and failure
Funding Faceoff creator and host Lori Greymont noted: "I've experienced both wild success and devastating failures and learned powerful lessons from both. One of my biggest takeaways is that collaboration beats competition every time. I was able to bounce back from failures much faster because of the support and guidance from having the right people around me."
Season One begins Oct 13, 2022, on Bargain House Network with additional distribution on Amazon Fire TV, Apple TV, Roku, and Samsung TV Plus, with talks underway for additional distribution and seasons.
