As my mentor used to say all the time “no matter how much money you start with, you will always run out at some point”. So start thinking through how to build up an investor list early on in your property journey.
My seventh webinar in my series of ten covers this topic in great detail – after all it was something I was hugely successful at – raising £1.5m in my first couple of years. But I learnt some great lessons which I am always happy to share.
There are lots of different sources of funds which need to be considered first, for example remortgaging to release equity was how we bought our first couple of properties.
But this game is all about PEOPLE and sharing with others what it is you are doing and why it gives great returns. Consider everyone – family, friends, hairdresser, gas man etc it’s amazing who knows who. Just by talking about what you are doing in property and that you are looking for investors to share the good returns, might spark an interest.
One of the key points I always make is NEVER ask for money directly – always listen to what someone wants and needs. It might not be a good idea to be desperate and then end up working with someone who doesn’t match. Sometimes its a small short term loan to test the relationship out, before then doing something bigger.
Don’t forget its a two way street. Its just as important for the lender to get to know you and to be confident in how you work and operate. Trust is key in any relationship, but even more so when it involves someone else’s money.
Risk can be varied and security can be provided – loans, joint ventures, short-term, long-term. But take care not to confuse early in discussions. It can take up to six months to really get to know someone. So don’t wait until you’ve got the deal of the century before finding the funds!
Maybe I was lucky with my banking background – there was experience of dealing with people and money. Borrowing money isn’t scary to me. But I know it is to many people.