GG – right in this article another property one. i want to talk about something i get asked all the time. which is how can i find investors for my property business and really that’s the wrong question to be asking and i don’t see a lot of people share the ideas
i want to share in this article when it comes to how to find investors. but we’ll get into that but the reason it’s such a question something that’s asked so much is because for a lot of people in their property business finding investment and getting investors.
is really that last key they need to unlock scale in their business because when it comes to most property businesses whatever the strategy whether it’s deal sourcing rent to rent service combination whatever it is developments the bottleneck is rarely finding the deals the bottleneck comes trying to fund and finance those deals because in the property business.
it’s not finding deals and the deals are out there it’s not an infinite supply but there’s a lot where the bottleneck is is funding it because you only have so much capital you can only allocate so much of your own capital those deals if you really want to unlock scale you need to be taking on investment in order to scale up make that happen finance those deals that you’re bringing in and we’re not going to talk about scaling in this article i’m going to say that for another article we’re not gonna talk about how to actually structure deals with investors and the legal process behind it and how to um structure the different partnerships and types of investment this article is all about reframing in your mind .
how to actually acquire investment how to actually find investors and really pitch for that investment and obtain that investment to allow you to do those things so so the reason how do i find investors is the wrong question to ask is because actually investors are out there there are so many investors in fact a lot of people are investors you know you can just walk into any networking meeting you could be your taxi driver could be an investor your friend of a friend your uncle they’re literally an abundance of people with money and capital out there .
what you really need to shift your focus to is how can i actually obtain investment not where do i find investors how can i obtain investment now when anybody asks me this question i always come back with one answer and one analogy and that’s think of dragon’s den so you go to dragon’s den if anyone watched it on bbc on tv for those who don’t know dragon’s den is where small business owners come on and they pitch to i think it’s maybe five dragons or these investors for investment in return for a stake in their business and they have to pitch why their business and why they as an individual.
are worth investing that’s an interesting point as well when an investor invests in a property deal they’re not just investing in that deal they’re also investing in you and you see on dragon’s den i’m sure if anyone’s watched just one tv show one one episode of this tv show you would have seen the same thing an investor comes in um a business owner comes in to pitch to the investors and there are some people that come in with a relatively good business but end up walking out with no investment and it’s not because they couldn’t find investors is because they couldn’t obtain the investment and that’s the point i’m trying to make it it’s not about finding investors because investors reverse how to obtain investment you’ll see other business owners come in on dragon’s den and you know they might get one investor one of the dragons out of the five to make an offer and instead of getting the business owner if they’re pitching for maybe a hundred thousand pounds for 20 of the business the dragon would say may say well i’ll give you the hundred thousand pounds you want in return for 40 or 50 percent of your business and so because that’s the only investor that’s the only really offer they have a lot of time the business owner they may take the offer they may not but if they do they often leave the room without the ideal scenario for them without the ideal outcome now once in a while there’ll be a business owner that comes in has this amazing business this amazing product or service knows his numbers it’s a really likable guy and he’ll have sometimes two or three investors fighting over him there’ll be other fighter all five investors wanting to invest in his business now who’s got the power in that scenario now the dragons are trying to pitch to the business owner why they should take the investment from them why they should be the dragon that they choose to go ahead with and you know there’ll be some animosity between the dragons they’ll be fighting over each other.
the business owners got all the power in that negotiation to pick either one or two or multiple dragons that they want to go with and they’ll always walk away from that room with the investment they wanted selling the equity in their business they only wanted to sell or sometimes even with an even better deal than what they wanted and so point being is that when it comes to finding investors when it comes to working with investors one you want to be coming from a place of abundance you want to have investors fighting to work with you and this can be achieved in many different ways because when you’re coming from a place of scarcity and you know you’ve got one investor you’re just going to do everything on his terms and he may not even be an investor you want to work with but if you’ve got a good product and in the property space a good product is good deals that stack up and you can articulate that well then investors will be much more happy to work with you and when i could say articulated work that’s one of the most important things because having good deals is one piece of the puzzle you need to be able to articulate to an investor who may not be clued up with property.
may not understand the jargon or terminology why that’s a good deal you need to know your numbers how many times have you watched dragon den dragon’s den and the dragons asking questions to the business owner the business owner can’t answer the questions because they don’t know the numbers and who wants to invest in something like that that doesn’t know simple numbers so you need to know your numbers you need to articulate clearly why that deal’s worth investing in and why that investor should work with you now i could also go into a whole other spiel about how to actually get in front of these investors because yes obtaining investment is one you one thing you do need to get in front of these investors as well and a lot of people that talk about social media and social media is great you’re gonna look at what what grant cardone has done with cardone capital.
you know he’s built uh almost a two billion dollar real estate empire with cardone capital purely funded from investors through social media social media is one networking events is one there’s many different ways and that’s not a article i’m gonna do now on how to get in front of those investors because there are a load of other articles out there but this is just one thing i’ve not heard enough people talk about in this space and so the outcome i want from this article for for you watching or someone trying to obtain investment.
is get really good at finding great deals not just average deals not just good deals but great deals and then know the numbers learn to articulate that in a way that’s clear that’s precise that anyone can understand and then investors can be far more likely to work with you and that may mean having investor packs that clearly show the numbers it may mean having quotes to back it up from contractors it can mean many different things but literally the purpose of this article this is a short article is to reframe in your mind it’s not a question of how do you find investors that’s not the problem the question needs to be working on a funding solution is how can i obtain investment and really that’s that’s the thing you need to be focusing on and so really just to finish this article off just to give you an insight into sort of what investors or potential investors are looking for when investing in property deals it really comes down to what’s the ideal outcome for them you know if they’re going to put money in what are they going to get out and what security do they have and so they need to know exactly what you’re acquiring the deal for what are the costs going to be.
and then what’s the return going to be and why and backed up with evidence but also you’ve got to think what’s in it for them what’s in it for the investor because ultimately that’s what they want to know if it’s their money they’re employing into you and investing into you it’s what are they going to be investing in what are they going to be getting out it’s as simple as that and too many people can’t answer questions clearly again back to the dragon’s den example how many times you see a dragon they’ll ask the business owner a question and the business owner will answer the question without answering the question it ends up just pissing the dragons off the they don’t invest you know they get frustrated because they just can’t get simple answers to simple questions and so always remember what’s in it for them as an investor so what are they gonna be investing in what security do they have so are they gonna be gonna get first charge on the property a second charge your personal guarantee what’s the equity in the deal in case something does go wrong do they have shares on the company is it an spv what what you know how much of what’s sort of leverage on the deal in terms of what’s the debt from other lenders things like that and also time frames.
so if they’re going to be putting money in not only what money they’re getting out but in in what time frames so working with investors is a huge huge topic you know we’ve got to talk about fca regulation we’ve got to talk about legal structures we’ve got to talk about how to actually um the different kinds of joint ventures and investment types so that’s the point i wanted to get across in this article again a bit of a short one now i’m going to be making more property articles as i discussed in the last one so if you want to comment below what you want to see what topics you want me to cover i’m also going to do some more lifestyle stuff as well you can check the links in the description if you’re interested in joining any of my paid programs there is a link to a free training there which you can watch at the end of the free training you can make a decision if you want to become part of the paid program or not worst case you’re going to learn something so comment like subscribe do what you need to do and i look forward to seeing you guys on the next article