In a previous blog, I explained what the Deferred Sales Trust™ is and how it works. But how do you unlock the power of the Deferred Sales Trust to unlock capital from new sources and from existing ones? In this blog, I’ll explain the three pillars of creating a Deferred Sales Trust marketing campaign and how this tactic will inform your current investors about your strategy and attract a sea of new accredited investors.
A Deferred Sales Trust marketing outreach campaign will allow you to attract ultra-high net worth investors from a diverse set of investments. By ultra-high net worth investors, I’m referring to those who have estate tax challenges (net worth above certain limits). For example, a recent ultra-high net worth Deferred Sales Trust client of Capital Gains Tax Solutions who has a net worth of $25M was selling a multifamily property in Colorado. They felt stuck since they had next to zero basis, $1.8M in capital gains tax liability, did not want 1031 and overpay for a property and they were facing a 40% estate tax if they just kept 1031 exchanging. They decided not to sell, that is, until they learned about the Deferred Sales Trust because it solved problems for them and moved them one step closer to their ideal wealth and estate plan.
By a diverse set of investments, I’m referring to those who own other asset types, other than real estate; such as cryptocurrency, businesses, artwork, collectibles, and public stock all of which are not 1031 eligible. Yes, all kinds of asset types, not just real estate. Also the ultra-high net worth investor.
Since a Deferred Sales Trust marketing plan focus allows you to attract the ultra-high net worth investor from a diverse set of investments, you will increase the amount of money you can raise and open up a blue ocean opportunity. The more investments you raise from ultra-high net worth investors the bigger deals you can do. A Deferred Sales Trust marketing campaign is a key to scaling, raising capital for your syndication business, and serving your current investors who want to sell the other assets they own and invest with you.
Now that you know the benefits of the Deferred Sales Trust marketing campaign, what are the best practices to create and grow one? I find that there are three pillars to a Deferred Sales Trust marketing campaign.
To attract the ultra-high net worth investor from a diverse set of investments you have to identify the problem, ask them to clarify their ideal outcome, and deliver a proposal to solve their problem while helping them unlock their ideal outcome. Be specific here. What assets of all kinds do they own now? What is their capital gains tax if they sold? Why haven’t they sold? What would cash flow mean to them? What would diversification mean? How much more impact will they have on their family and causes they believe in by moving funds outside of their taxable estate?
Step one is to attract ultra-high net worth investors from a diverse set of investments. Pro tip: start with your existing investor base and then branch out to new investors.
The second part is capturing their interest in the Deferred Sales Trust. Create a landing page with a free e-book and title it, “Eliminate the 1031 exchange forever: how to defer capital gains tax of any kind and invest passively with NAME OF YOUR COMPANY.”
Once someone has shown interest, you need to help them take the next step by walking them through step by step how this works.
The more clarity and deal stories you provide through Deferred Sales Trust content, the more they will see the benefits and be attracted to use the DST.
After attracting the ultra-high net worth investor and delivering the Deferred Sales Trust and your CRE investment opportunity to help them reach their ideal wealth plan, the investors’ confidence in you will grow and they will invest in your deal with you. But this isn’t the end of the strategy. As you convert more and more of your existing clients using the Deferred Sales Trust, referrals will come and a new blue ocean of investors will come.
To benefit the most from a Deferred Sales Trust marketing campaign, you need to capture their story and then share their story. My favorite is via a video/podcast which I post on Youtube, Itunes, and Spotify to name a few.
Overall, a Deferred Sales Trust marketing campaign is a great way to efficiently scale raising capital for your syndication business. The strategy is to attract ultra-high net worth investors with a lead magnet and develop the relationship through providing a solution to their capital gains tax problem which helps them take one step closer to their ideal wealth plan. Then, as existing investors are converted to Deferred Sales Trust investors, capture their story on a video/podcast to scale even more.
About the Author:
Brett Swarts is considered one of the most well-rounded Capital Gains Tax Deferral experts and informative speakers in the nation. His audiences are challenged to create and develop a tax-deferred transformational exit wealth plan using The Deferred Sales Trust™ (“DST”) so they can create and preserve more wealth. Brett is the Founder of Capital Gains Tax Solutions and host of the Capital Gains Tax Solutions podcast. Each year, he equips hundreds of high net worth business professionals with the DST tool to help their high net worth clients solve capital gains tax deferral limitations.
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.