Raising Money for Property Isn’t Easy!

Raising Money for Property Isn’t Easy!

Or is it? It might not be if done correctly…at least in my personal opinion.  Your long term property success depends on raising money for your projects smartly. What does smartly mean?

1. No personal Guarantees
2. Have enough time to flip or get finance
3. Do not overpay on rates

Have you ever considered, a financial advisor that makes investment allocations for ultra-high net worth families? It is very hard in this world to get safe returns. Bonds…stocks…commodities..hedge funds…VOLATILE!  Over ten years ago I started a bridging company. I had together a whooping total of 5 investors. After all these years, these investors are still friends and colleagues. I believe that a major reason for this is that I didn’t oversell the opportunity. I detailed the risks and under promised and over performed. I even closed the bridging company in Jan 2006. I felt there was too much risk in the market and preferred not to lose my money and theirs.

When you have Joint Venture partners & investors, you will have to talk to them on a regular basis to update them on current events and performance. If the investment is doing better than you promised, your investors will think you’re a hero. If it does worse than you promised, you’re a jerk. No one wants to be a jerk.

I explained it to my investors this way: “The unlikely worst case scenario is you could lose money, my goal is to earn you a 10% return with a first charge, and you’ll do slightly better than that if we did a joint venture on a project together…but with potentially more time & risk. I told them the risks, I told them my goals, now it was up to them to decide if the risk was worth the reward. None of them ever lost a penny and were mad at me when I decided for everyone’s best interest to close the bridging company in Jan 2006. They all thought I was paranoid and made enough money….They saw what transpired and were even more pleased with me.

If you want to keep your investors for the long term, start by recruiting the right investors. Attract the ones that expect a return aligned with the opportunity. Look to reach out to investment advisors as a source of capital.