Investor · MA · Member since 2019 · 122 posts · 11 votes
Hello All -
I am working on a written presentation to show potential investors why they should invest in our business. I wanted to create an "Investment Sheet" that will outline the details of the investment.
The obvious items such as the address, sq.footage, and intended renovations will be included.
My question, however, is should I include intimate details such as the purchase price of the property. Should I disclose how much we intend to sell the property for, or other costs pertaining to rehabbing the property?
How do you handle it when those questions arise? "How much did I pay, how much will I sell for, what did other investors invest?
How much information is reasonable to provide to investors?
I don’t think how much you paid is relevant your selling price and rom you have for negotiations are key but that is also for more in-depth considerations.
Sorry room you have to negotiate your end buyer only wants to know it’s a good investment for them ,if you decide to come down on your fee it’s your decision to make the deal sweeter for them. Your putting out general info to attract buyers, keep it short . And don’t forget your earnest money with a did not perform clause.
Investor · MA · Member since 2019 · 122 posts · 11 votes
6y
Sorry, I must have not been clear in my question.
This is the scenario:
I’m purchasing a house by putting down 20% on the purchase price. A Hard Money lender will cover the 80% of the purchase and 100% of rehab.
In an effort to use other people’s money, we have some people willing to invest in our project. We could have them cover the 20% downpayment or the monkey carrying costs. At the end of the project we will pay these investors 12% interest.
In my presentation to these investors, I’m wondering how much info do they need to receive about the property and how do I handle their prying questions. How much we paid, how much we selling for etc.
Real Estate Broker · Vancouver, WA · Member since 2018 · 168 posts · 120 votes
6y
Hey Keith,
For an SFR LTC deal such as this, I would consider providing the following (in no particular order):
Address
Purchase price / renovation cost estimates / ARV or pro forma CAP rate
Deal structuring (equity vs loan proceeds)
Projected rehab timeframe
Beginning date of project (day escrow closes)
Projected exit date (expected sale date)
Surrounding comps to justify purchase & sale price
Equity distribution project structuring (will returns be a fixed % for GP & LP(s), or is there a waterfall equity return model based upon varying levels of success)
Expected ROI distribution date (After exit, and if profits, when can investors expect to get paid)
Those are just top of my head, you may not need everything in there depending upon the investors you're looking to approach this deal with. You may also want to throw in a "Funds Due By" contract as well. Because the last thing you want is for an investor to say "Yeah, I'm in!" and then go MIA when funds are needed to close escrow.