So today’s video is the final instalment in my 7 areas of due diligence that you should be paying attention to in your business if you want to be the one who walks away with the Investor money. Over the last few days I’ve been sharing how you can de-risk your projects for your own peace of mind, but also how that is very attractive for potential investors too.
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Today I’m talking about the micro and macro economics. To me and you, in simple terms, it’s the drivers to the market and to the economy and understanding them.
So why should you care about that?
For two reasons – one is that you want to understand who’s buying or renting from you, their affordability, the sustainability of that particular market. If you’re working with lets say a professional clientele or you’re working with an LHA tenant, both of those have huge drivers and depending on where you focus – an area or a niche – understanding what drives that micro economy is very important. You’ll then understand what your exits are in a project, how to maximise the potential, what audience you serve and your investors will want to know this as well. They’ll want to know what your exits are, the economy change, what are those factors that change that are driving your local area that will allow you to go from maybe lets say a professional tenant, a working tenant to potentially an LHA tenant or what allows you to continue to operate if you’re in sales – the help to buy scheme when does that change.
Then we start to get to the macro economics. What are the big decisions that are being made that’s driving the economy – whether it’s the way the interest rates are running or working its where the planning decisions are being made. Understanding the bigger impacts and how it impacts on those who are buying or renting from you and the way the projects and properties are being marketed will help you get clarity on where the risk lies and where the opportunity lies as well. For your investor – they love to know this, they WANT to know that, so that they understand and see your view of this, your knowledge, your experience, your expertise, your foresight in understanding that allows them to have comfort that you are effectively de-risking their investment for them.
Lots of People talk about the uncertainty in the market at the moment – whether it’s Brexit or the interest rates. In my view I would suggest NOT focusing on just how the interest rate might change – but for me in my experience it’s been in having a model that allows for that to happen and in allowing that to happen, you have exits at different levels so you know what to do if anything changes. Setting up your finances and your system and the way that your business operates given that changes may happen in the market – that’s something that I would recommend you get used to and get comfortable with. You assess your deals and take into consideration that you need to be flexible in understanding how the market works . These are all key elements that will help you stand out over and above the others in the room who are maybe speaking to the same investors as you. These little elements that we’ve been sharing over the last few weeks added together, they increase your security in your business because they de-risk your business but also make it more attractive to investors.
I’m going to be sharing lots and lots more content -as it happens with people that we’re working with – from individuals raising a few hundred thousand up to those we’re working with to help them build multi £million funds. The information I’m sharing you may find valuable for building your business going forward. For me I’m passionate about you guys understanding how to get the investors, how to raise money because I think the money is fundamental to building your property business and lots of people leave it until afterwards and that to me is plain mental. So lets focus in on how you get liquid in any market and I’ll be sharing more of that as we go through the coming weeks. There’ll be a link here about the Facebook group that we run if you want to get involved come over and ask questions and share your successes and challenges and it will be my pleasure to help as much as I can wherever possible.
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Have fun and let us know how this is helping you!