Hi,
I am in the process of setting up my company and a unit trust and will be specializing in property renovation (buying below market value, renovating and selling for profit) ie: fix and flip. Rather than sourcing traditional funding (bank loans), I plan to seek funding through a joint venture agreement or via an investor willing to invest in my company and earn very generous returns on their investment.
I am wondering if anyone knows of the best way to go about seeking investors or JV partners? I know there are websites that do this but I’m not sure if this is the best option? These websites charge a minimum of $200 each so would I have to advertise on all of them? I have lots of literature about my business including a business plan to present to those who are interested however I would appreciate some direction before I jump in.
All suggestions are greatly appreciated.
Thanks
The Renovator | Renovators Delight
Hi Renovator
How much of you own cash are you tipping in to the deal and what sorts of rates of return are you expecting.
We offer investors between 1.75%-2% per month on some of our investment products and personally tip around $10M.
Be in interested to see how much you are putting in to the deal or what other investors expect.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
I will be providing the business name exposure and maintain total responsibility for the complete project. This includes all planning, costing, renovating, sourcing, insuring, organising and a massive investment of time. In light of this, I am seeking either silent investors or joint venture partners who are willing to fund the total cost of the project (maximum $400k) in return for up to 40% share in the profit return within a 12 week or less turn around time.
I have invested a great deal of time, money, energy and passion into getting the structure of the company and the specifics of the project plans organised so that every chosen property project runs as perfectly as possible and maintains a generous ROI.
Like you, I am also interested in knowing what other investors expect.
Yours in Renovating
The Renovator
The Renovator | Renovators Delight
In my honest opinion. If I was going to invest up to 400k I would be looking to leverage it a bit better then making 40% of the profit on a 400k investment. That means your looking at buying under 350k properties with some money in there for renovations bills sales costs and marketing and a contingency and I will say interest (because if that money is out making a return then it’s not in a offset account etc saving you money).
Then I would look to the person in charge and look at there background history. How many properties have they renovated. How much profit they have made. can you give me some addresses. I would then use RP data to confirm that the above addresses were bought and sold at the times for the prices the person said. I would use a building estimate on the costs of works and level of finish those properties displayed to estimate the renovation budget and to back up the profit that was stated for those projects.
I would want to know if your a beginner or a seasoned renovator with the tools and experience to manage my money effectively and produce the results that you say.
Hi Wilko,
Thanks for your honest feedback. I appreciate it a lot. The main reason that I am choosing to source an investor or JV partner is because I am a beginner in this particular business and I am hoping to seek the expertise of someone in the field. I have spent many months (even years) researching, reading, analysing, attending seminars, speaking with RE agents, meeting with experts and much, much more. I have everything in place to proceed including a trusted accountant. That said, I am committed to continual learning and strongly believe that there is always more to learn from others. I am surrounded by family and friends who own businesses and have also received lots of direction from them. I have every step of my project mapped out and am positive that I have the expertise to make substantial profits. Everybody needs to start somewhere and that is why I am asking.
Yours in renovating
The Renovator.
The Renovator | Renovators Delight
My advice would be to get some money together yourself and put yourself in a position to leverage that money to buy renovate and sell a property. Because if you are confident you can make a profit then putting down your own money wouldn’t be a issue. Unless you had some skin in the deal and something to lose. A investor isn’t going to take a punt on you just because you know you can do. You have to show people you Can do it. Majority of people are cynical, at this stage whilst it is still commendable that you are making a effort. Unless you have some background trade skills ie your a builder and your not letting people know that. Because that would be a more reassuring quality that the physical aspect of the renovation would be taken care of.
I agree with Wilko save up a few dollars and do a project or 3 yourself and get some runs on the board.
Any serious investor isn’t going to do a JV just because you have spent a dollar or two in setting up a basic structure.
I would get an email or a phone call or two from forum members a week asking me if we would JV them or invest in their projects and i have to say we reject 99% of the deals as we can get a better return ourselves without the risk exposure.
You will need to be offering something rather special if you are expecting an investor to put 100% cash into a project and i have to say 40% of the profit just isn’t going to be cutting it.
Cheers
Yours in Finance
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This reply was modified 9 years, 10 months ago by
Richard Taylor.
Richard Taylor | Australia's leading private lender
Thanks for the advice. It’s great to know what investors look for in a good deal and what they would immediately reject. Richard, when you say ‘you will need to be offering something rather special’, what type of thing would you be referring to? A larger profit return?
I accept that I may need to do my first few projects myself, however I am interested to know what sorts of things investors are looking for in a good JV deal (when the time comes). I’d love to hear from investors (or anyone that knows) how to best present a good JV deal and where to seek JV partners. Angel investment sites, investor meet ups, sites like this, word of mouth?
Your assistance is greatly appreciated.
Yours in Renovating
The Renovator
The Renovator | Renovators Delight
Experience. and having some runs on the table ie previously projects and results.
Development is like a business…it all starts with an idea and as you know 90% of small business fail in the first 2 years and the that one makes it; only 50% make it past the 5 years mark. All good that you have all these ideas and business plan written up; but action speaks louder than word.
I deal with a lot of private money exp from china and singapore and all our investors and angel investors including myself look for experience and previous results = stability of return. We rather receive 20% return knowing 95% for certain we will get our money back VS 70% return and JV-ing/lending it to some long shot.
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This reply was modified 9 years, 10 months ago by Mick C.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
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This reply was modified 9 years, 10 months ago by
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