There are many tips to be considered when it comes to pitching a business or investment opportunity. In the world of real estate, there are some very specific pitfalls that you should avoid at all costs while crafting your pitch deck. It is especially important in this industry where investors can be a little risk-averse and nervous about their money.
For that, here are some tips.
Avoid Confusing Language
In a business proposal, there is usually a lot of technical jargon thrown around. In the real estate industry, however, you want to avoid confusing or alienating any potential investors with your unique terms and acronyms. You should do your best to explain even the most complex commercial real estate concepts in layman’s terms so that the average person can understand it.
Most people have a general understanding of what a house is and how it works, so you should actually avoid using this as an example in your deck. It’s too easy to confuse the majority of people with terminology that they may not be familiar with, such as ‘cash flow.’ There are other more exotic terms that also need to be avoided.
Avoid using words that have a negative connotation in your pitch deck examples. For instance, the word ‘distressed’ typically calls up images of foreclosure and bankruptcy in most people’s minds. Instead of painting a picture of a trouble property, you should consider describing it as a ‘value-add opportunity.’ This way, you’re giving a more flattering picture of the asset during a market downturn.
Avoid using terms that may have different meanings depending on which industry your investor is from. You should avoid sayings such as, ‘It’s time to harvest our efforts’ or ‘We have been unduly hampered.’ While this might seem like common sense to most people, it’s not uncommon to see phrases like this in a business plan.
Business Plans Vs. Pitch Decks
Many real estate entrepreneurs fail to realize that a pitch deck template is very different from a business plan. In most cases, your pitch deck can be anywhere from ten to fifty slides long while traditional business plans tend to run around 100-150 pages.
The purpose of your pitch deck is to get an investor interested in doing business with you, so you should avoid bogging it down with all kinds of charts and graphs. They may not be able to see past the sheer number of slides if they are inundated with too much information at once.
If investors are interested in what you’re doing, they will ask for the more complete business plan. That’s when you can fill in all of the details that investors want to see.
Pitch Decks Should Be Tight
You should aim to get your entire pitch deck down to about ten slides so it’s quick enough to get through but detailed enough so an investor doesn’t get overwhelmed. You should also be prepared to do a quick pitch in person if the potential investor is interested enough.
It’s important not to leave out key details, but it’s equally important not to overwhelm your listener with too much information at once. If they want more, that’s what your business plan is for and you can expand upon what you know they are interested in.
Pitch Decks Should Be Focused
Again, you are aiming for your pitch deck templates to be around ten slides. If there are any additional slides that aren’t directly related to the business opportunity at hand, they should be eliminated immediately.
You want your investor to focus on what you’re offering and not get bogged down with extraneous information. Everyone loves a good infographic, but they should be reserved for websites and magazines rather than your pitch deck.
You also need to make sure that you don’t overload on too much information in one slide. You want to keep your pitch deck design tight, so make sure that your bullet points are clear and concise enough to convey the idea without taking up too much time.
It’s important to make sure that you remove industry specific terminology from your pitch deck and replace it with more common terms that anyone can understand, such as ‘return on investment.’ Here is a list of some other commonly used acronyms:
ENH – Enhance FF&E – Furnishings, Fixtures & Equipment
PP&E – Plant, Property and Equipment
ARV – After Repair Value
SPM – Standard Percent of the Market
AUM – Assets Under Management
NCS – New Construction Stage
NCO – New Construction Opportunity
REO – Real Estate Owned SFR – Single-Family Residential
HTL – Hotel
Take Your Time
Don’t treat your pitch deck like it’s a rough draft that you can edit later. Take the time to make each slide polished and professional looking, even if you end up throwing half of them away in the end.
Your pitch should be honest and concise while presenting yourself as an experienced businessperson. It will be the first impression that you make on an investor, so it has to be absolutely perfect or they may not give you a second chance.
Take your time, show off your best work and you’ll find yourself with the funding that you need to make your real estate dreams come true.
For the impression you need to give in your pitch deck, check out Venngage.
The real estate business is a difficult one. The marketing and sales processes are important to the success of a company, but it can be tough to come up with an effective pitch deck for investors. If you need help creating your own sample pitch deck, here are some helpful tips from professionals in the field.