How To Get Other Investors To Fund YOUR Property Deal
What if I told you that you don’t need money to invest in property…
It probably goes against everything you believe about property investing, doesn’t it?
It’s been drummed into our heads that we need millions in the bank, or at least a fat pay cheque to get into the property market.
This simply isn’t true.
I’m here to tell you that if you’ve ever wanted to get into property, but just don’t have the money, I’ve got the solution!
Professional property investors never worry about finding money for a deal.
Because they have an investing ace up their sleeve…
A trick that allows them to build their property portfolio’s without using a cent of their own money.
Today I’m going to show you how we do it.
The Two Things You Need To Do To Make Money From Property
In property, you always have two jobs: The first is to find deals, and the second is to find the money.
Most property investors tend to fund their deals themselves, and the ones who can’t normally give up.
But what they don’t know is that one fantastic way to fund your deal(s) is to work with an investor.
The question is, how do you find and approach these investors?
First off, you need to think of an investor as any person who commits capital with the expectation of financial returns (and usually returns that are higher than what the banks offer).
They utilize investments in order to grow their money and/or provide an income during retirement, such as with an annuity.
Essentially when working with an investor, it’s about using their money to make more money, of which you’ll get a split of.
The first step to getting funding from an investor is to actually find one.
Where To Find Property Investors Itching To Fund Your Property Deals
In my years in the property markets I’ve found that the best place to meet potential investors is through property networking events.
It’s pretty simple to find these events. Keep an eye out for local property groups on Facebook, or even LinkedIn. Alternatively, a quick search on Google can do the trick too.
You have to be active in finding these events, they won’t just fall into your lap.
Most of the funding that I’ve received for these types of deals was from investors I’d met at networking events.
One thing you need to know, and something that’ll work in your favour, is that there aren’t many good property specialists out there.
Investors are hungry to make their money work harder for them, which is why they attend these events, hoping to meet someone with a few potentially profitable deals on the go.
Once you’ve found your networking event of choice, you need to be prepared to meet investors.
But what exactly do you say and do once you’ve found one?
How To Approach An investor At A Networking Event (And Exactly What To Say)
The first rule for this side of property investing is your image.
If you attend the networking event in flip flops, you’re going to get flip flop investors… With the emphasis on ‘flop’.
You need to dress professionally.
Show potential investors that you’re a serious property investor / businessman. The more seriously you take yourself and your image, the more seriously your investors will take you.
Make sure you have professional business cards with you that have an appropriate business email address.
Nothing screams ‘amateur’ like a Gmail email address.
Business cards are cheap to put together and print, but it’s a small investment worth its weight in gold!
You also want to make sure you talk the talk.
Again, nothing says amateur like someone who can barely speak without stuttering and sweating like and nervous teenager.
Remember, you’re a professional businessmen, and you’re offering other businessmen the opportunity to make more money.
You need confidence in your approach, otherwise your investors won’t have confidence in you.
Once you find the right potential investor, you need to say the right things.
Here’s a rough script I use when approaching a potential investor:
Hello, my name is X and I’m a professional property investor.
I’m looking for a few select business partners to invest with.
I have numerous property deals in the pipeline and need the funding to make them work.
We’re about long lasting partnerships that beat the banks interest rates on a regular basis.
Would you be interested in talking more with me during the week?
A trick I’ve picked up is that you don’t speak about the deal while at the networking event.
It’s too noisy and you'd require the investor’s undivided time to run through the numbers - something which wouldn't happen at these events.
Instead, get their contact details and arrange for a coffee or meeting later in the week.
At the meeting, you can spend time understanding what the investor is looking for (in terms of returns), and you can also see whether this person is a good fit for your deal / you.
It’s important to look for partnerships with investors.
Long-term prospects are great for the bottom line.
Now once you’ve developed enough rapport with your investor(s), it’s time to setup your proposal document.
The Deal-Clinching Document That’ll Ensure You Don’t Put A Cent Down
Your proposal document, like your business card, should scream professionalism.
And it needs to have certain things in it to do so.
The document should be structured as follows:
1. Front cover with a professional business name
2. Index (contents page)
3. Introduction of the deal (executive summary)
- Explain how the property was found and what the nature of the property is (is the owner distressed or is the property distressed etc)
- Explain what the strategy of this deal is (is it a rental opportunity, a flip strategy, etc)
4. Introduction of yourself
- Use this section to build credibility. Speak about your previous deals and the returns from those deals. If you don’t have any previous deals, you can talk about your coaches experience or people on your team. This section is incredibly important because you are showcasing to your investor that you can take this project on
5. Basics of the property
- Features (3 beds, 2 baths etc)
- Pictures of the property (professional pictures, not camera photos)
6. Supporting documentation
- The signed Offer to Purchase (OTP)
- Quotes from at least two reputable builders
- Snapshot of the LightStone report
- ROI and investment payment plan
To find the right investor is all about networking in the right circles, dressing the part and presenting well-documented, profitable proposals.
With this approach, you will have investors eating out of the palm of your hands.
And when that happens, you get to build your property empire without using a cent of your own money!
Building Your Property Portfolio With Someone Else’s Bank Account
Don’t ever let the excuse “I don’t have enough money” be the reason you don’t invest in property.
I’ve been where you are, I know what it’s like to not have those phantom millions you think you need to buy property.
Investors are out there, waiting for you to approach them with fantastic property opportunities.
And when the right one’s land on their doorstep, presented by the right people, funding becomes a mere formality.
Don’t ever let a lack of funds be the reason you don’t invest.
The money is there, you just have to find it.
Until next time, be bold and go build that property portfolio.
Analyst, The SA Property Investor
The Money Lab