​How to Find Property Development Finance Partners

Serious real estate development investors recognize the importance of property development finance. Finding the best partner for the job is not as difficult as some might think. While the construction loan process may seem daunting to a new investor, there are many viable options for finding the capital required to launch a successful real estate venture.

Debt Partner Versus Equity Partner

Before actively searching for property development funding partners, it is important to consider the particular project and how best to structure a partnership. While equity partners generally participate in the project for an ownership portion of the proceeds, debt partners act more like lenders who loan money for a set interest rate. Both types of partners can be invaluable for real estate deals.

Personal Networking

The time tested strategy for finding a financial partner for a real estate development project is to talk to friends, colleagues and family members about your upcoming project. While such a strategy sounds like common sense, many investors don’t realize the power of networking. People often underestimate the results that can be garnered by simply putting the word out on the street about a new project. Investors are always looking for a way to make their capital work for them and they listen for good opportunities.

Industry Networking

In addition to personal networking efforts with friends and family members at typical social gatherings, local real estate investment associations can provide an excellent networking option. Since every person involved in one of these associations is a potential partner, the odds are good that a suitable financial liaison can be identified in an investment group. The local Home Builders Association is an excellent place to start. It is important to remember networking etiquette when you are new to a group. Investors looking for money should never crash the meeting without offering to help other networkers first, before aggressively seeking help from the group.

Land Owners

An obvious party to approach when considering a real estate development project is to think about the parties most likely to benefit from the investment. The current land owner is an obvious contact who might be open to participation in the project. Neighbors often represent very interested parties likely to consider involvement in a project that will ultimately benefit the neighborhood.

Crowdfunding

Since the Great Recession, crowdfunding has become a “Go To” source of funding for business ventures. Crowdfunding allows the general public to participate in investment deals that were once reserved for banks and professional real estate investors. Entrepreneurs seeking capital investors can apply for funding through a crowdfunding site and find numerous partners interested in investing in their project. Some of the top real estate sites are RealtyShares, Fundrise, RealtyMogul and Patch of Land.

Conclusion

Whether an investor is contemplating the construction loan process and the best construction loan or preparing a business plan to attract investors on a crowdfunding site, there are many sources for property development funding. The key to finding the necessary capital is knowing where to look. Finding a financial partner is not hard for investors willing to consider their many options.