One of the biggest blockers to slowing down people’s property journey is raising private finance. Property is expensive and sooner or later you are going to run out if you are using your own funds.
Having access to armchair investors will significantly accelerate your progress.
There are 4 P’s to raising private finance and they are People, Project, Paperwork and PR (Investor Relations).
It is often said that property is a people business and they do form a critical part of the puzzle. The first place to start is you. What are your goals and aspirations? What is your reason why? What is your motivation for succeeding?
Start by understanding what you bring to the table and be clear in sharing that with others. Then start looking at what makes your ideal investor. What differentiates them from others? What problem do they need solving? Interest rates in banks and building societies are still exceptionally low, Pensions aren’t really providing sufficient returns, the list goes on.
Understanding people’s values is also important. Are they in alignment with your own? Seeing eye to eye with your proposals and risk levels will help you communicate better.
The next stage is the Project. The key element with any project is the exit strategy, or should I say strategies. Having more than one exit will give your investors more confidence. You need to really understand your numbers and the impact of any delays or increases in costs. You also need to be aware of the impact of things you can’t necessarily control, particularly mortgage revaluations at the moment.
The paperwork also needs to be in order. I strongly advise that you seek proper legal and tax advice from qualified professionals in this matter. Ensure they understand what you are doing and make sure you follow their advice. There will be a cost attached to this but view it as a cost of being in business.
Of course throughout the whole process Investors are looking for transparency. Keeping them informed the whole way through the process will help you build on your relationship. Good PR will keep them coming back for more!
In the UK we are not good at talking about money and see working with investors as begging for money. Actually the reverse is true. You are presenting an opportunity to help someone. Get the right message to the right people and you will will attract all the finance you need.
Guest Post by Tim Matcham
Tim is author of the book “How To Attract Armchair Investors for Property” which is available on Amazon in both paperback and Kindle versions. There are plans for an Audible version soon.