So I have an investor in my hometown that I use. I found two properties SELLER FINANCED with an extremely low amount down. I am a construction project manager/estimator so I know how to fix and evaluate the renovation costs for a property. The cap rate was going to be 18%!! My investor didn’t bite... does anyone have any advice on how to approach an investor with a deal without trying to sound salesy? The deal was in Attleboro MA
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
6y
The best time to approach an investor is BEFORE you have a specific project in mind. Find out what type of properties and returns he/she prefers rather than bring to the table those that you prefer. I have flippers daily who pitch their deals to me - and 99% are not of interest to me. It may be the market, the timeline for completion - or not having one documented at all, the valuation, and most times than not - the financial risk is all mine and the gain diluted.
It doesn't sound like you actually have an investor - just an occasional source of funding. A serious investor will have an acquisition plan for the year and a targeted ROI. That investor isn't waiting to be pitched to invest. Elevate yourself from a construction/flipper guy to the go-to source for meeting his/her financial objectives. Stop pitching and start consulting.
Rental Property Investor · Springfield, MO · Member since 2019 · 462 posts · 365 votes
6y
You have to know your audience and what type of investor you are approaching. If you are working with an institutional investor then you will probably need detailed financials and timelines showing total costs, returns, and major milestones. If you are asking a friend or relative then they may want all of the same things but also need someone to paint them a picture of what the entire process looks likes. Others may trust your reputation and not need as much hand holding and 'sales pitching' in order to get their financial support.
It all boils down to who are you talking to, and make sure you are talking to them in their language.
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
6y
The best time to approach an investor is BEFORE you have a specific project in mind. Find out what type of properties and returns he/she prefers rather than bring to the table those that you prefer. I have flippers daily who pitch their deals to me - and 99% are not of interest to me. It may be the market, the timeline for completion - or not having one documented at all, the valuation, and most times than not - the financial risk is all mine and the gain diluted.
It doesn't sound like you actually have an investor - just an occasional source of funding. A serious investor will have an acquisition plan for the year and a targeted ROI. That investor isn't waiting to be pitched to invest. Elevate yourself from a construction/flipper guy to the go-to source for meeting his/her financial objectives. Stop pitching and start consulting.
Real Estate Investor · Bristol County, MA · Member since 2010 · 153 posts · 37 votes
6y
@Casey Dimascio, are you looking to purchase the deal with the help of the investor or are you presenting the deal to the investor to buy?
Side note, I invest in Attleboro, so feel free to PM me if you end up looking for someone to who may have interest in the property(ies) and/or want someone local to take a look.
I am looking to partner with him on the deal. The problem is he is worried about the purchase price and doesn't understand the value in owner financing. I need financing for down payment offered and rehab pricing