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How to raise finance for property investing is one of the most common questions that I get asked.  So I thought I would focus on the biggest mistakes that people make when trying to “pitch” their deal to a potential investor.

Did you know that 55% of the information humans communicate when they address one another comes from their body language? 38% comes from their tone of voice and only 7% of the information comes from the actual spoken words. (Source: Psychology Today)

This fact highlights the importance of walking into any investment meeting with the correct body language, but more importantly armed with the knowledge of the project you are offering to potential investors.  Having this knowledge will increase your confidence and give you the right “posture” to impress your potential investor.

De-Risking Your Project   

When you start to understand and appreciate the risk from an investor point of view, you will work at protecitng their investment by focusing on ensuring that all their concerns are addressed through the way you operate your business.

  • You will ensure you have brilliant extensive due diligence when buying a project
  • You will understand the macro and micro economics of your particular market and area.
  • You will be diligent in your contracts with the contractor and professionals you instruct.
  • You will be stringent on your checks through the project
  • Your debt and equity will be raised efficiently.
  • Your exits will be thought through, checked and in place before you purchase the project.
  • You would have thought through and stress tested many scenarios so you expect the unexpected.

The result=You will attract serious amounts of investment meaning you never leave a deal on the table.

Asking for Money Too Early On

Many people building their property portfolio and trying to fund property investments try and jump in too soon when talking to the potential investor, so they miss what the investor is really looking for.  The inexperienced business owner will be asking the potential investor what they have to invest and what sort of ROI they are looking for.  But the key is to engage with the potential investor, find out their true motives for investing, what issues they may have and what they are ultimately trying to achieve.

If you walk into the room where your investors are sat, full of confidence, enthusiasm and knowledge about your proposal, and then you are engaging with them and listening to what they have to say, then you will know exactly when and how to “pitch” your deal.

In his latest video, Stuart talks about why too many people make the mistake of asking investors for money too early into their investment proposal discussions.

 

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