If you want to get investments for your real estate business then you need to be realistic first. You will not get 100% financing. The most that you can expect is 80-85%, you need to come up with the remaining 15-20%. You can come up with the cash from your own finances or from your partners’ finances if you have partners.
If you are infusing cash into the business then you will be able to have full control of the business but when you get outside investment it means that you will have lesser control. Your profits will also diminish and you will be making profits based on your investment only. However, if you invest only 15-20% then you will be able to have more cash in your bank and you can invest in other projects and have a diversified portfolio. This way even if one of your projects fail you will be making money on some other project. Your risks in the business are also reduced considerably when you only have 15-20% invested in the business.
To get investments for your real estate business you need to first make a proposal. An investment proposal should highlight the amount of investment needed, the returns on investment and the time it will take to recoup the investment. Investors will invest only if it is feasible and they are sure of getting back the money invested with profit. However, if your proposal is good you can get investments. Some real estate investors have invested without a proper proposition, just because they believed in the business or in most cases they believed the person. Such investors have also found enormous success too. Creating a business plan with details about investment needed, the way the business will be scaled up, how much investment is needed immediately and how much is required as the work progresses, should all be detailed in a clear and concise plan. With the same plan you can meet many investors and even if one or two decline you will still be able to get investment from others.
Not all investors believe in a proposition that is not professional. Hence you need to provide a professional proposition and for that you need to create an executive summary which details the project and includes the investment details. This should include how much you are investing personally and how much you expect from your investors. The executive summary should be enough for most investors as they will most likely not look into all the details of the business plan. Most investors will invest only if you have a considerable personal stake in the business. If you do not invest much then the investor will raise a red flag and not invest in your real estate business. So try to keep a good personal stake in the business, after all it is your idea and you are going to put in your valuable time and effort.
Getting an investor is not an easy task. You need to make a lot of calls and following that you need to set up a meeting and once meetings are scheduled you need to ensure that you present your business in the best way possible. The best way is to create a wonderful power point presentation and provide details in a proper way. You should also highlight the way the investor will make money from the project.
When it comes to real estate business there is a lot of risk and when you are investing your time and money for the project you should keep a good amount of profit for yourself. Investors will haggle to get the most out of your project but if you stick to your stand you can get good returns for your investment as well as get good returns for the investor.
You should also negotiate with the investor regarding the control of the project. You need to make it clear at the outset that you will be the one who will be in charge of the project. The investors should not take part in the day to day activities of the real estate business. They will get regular updates and details of progress but overall everything will be done by you. Though there is no stated rule regarding this, it is ideal to have control. You should in fact hire a good lawyer to lay down the rules and with those you can easily have control as well as ensure that the investor gets their returns. Having a previously successful venture will also help. You need to document that fact and share it with your investors. When investors know that a person has already been successful once, they will not hesitate to invest in your real estate business.