Investor clients for builders
I am a builder/investor and now small developer in Pensacola. In the past year and a half I've built and exited 3 new construction duplexes and single family. We have 2 under construction right now and a minor subdivision (4 lots) in development. On the financing side, built the first with my own money. Used a county program to produce affordable new homes to build one sf spec and built the other with my own money. I have bank financing for the current duplex and the single family financing is tbd May go hml, may get the bank again.
We build a good product and want to build better products. Our single family's have been targeted to the entry level market. Our duplexes are targeted to house hackers. Im not sure about pushing the price points higher but we don't want to be known as a cheap builder.
I've built a few systems and processes to make our business run. Hired a couple of people. We run an honest business, and have clients and members on this board that can attest to that.
I don't have private lenders or investors and I think I need one or both to scale.
I don't know how to go about attracting investors. I have a lead form on our website for investors, but no one has ever completed it.
If I had investors, I could acquire more land. I only have so much cash, and these projects take a minimum of 6-12 months from land purchase to exit. I see good land deals every day and I have a good screening and valuation formula for land acquisition.
When I say investors I mean investor clients. People who hire us to build new homes and duplexes. Obviously they want to get the new home for as little as possible. Thus far I've treated the few investors that asked me as I would any other client. I've offered cost plus contracts which may make them fearful.
Now equity partners, I don't know what makes that deal attractive to each party there either. My take on that is like, why would I take on an equity partner and pay them 20-50% of profits when I could just borrow from a hml and pay less? If they owned a very good parcel of land I suppose thats different.
For the builders here, what have you done to attract investors and private lenders.
For the investors buying new construction, what are you looking for in a builder?
For the investors partnering with builders, what does that structure look like?
Lots of questions I just dumped on everyone. Let me know.