Forums / Property Investing / Value Adding / If you needed cash for a profitable project, would you look for a cash partner?

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  • Profile photo of Mario LligeMario Llige
    Participant
    @mariollige
    Join Date: 2016
    Post Count: 3

    Here’s the scenario. You’ve done the numbers, and you’re looking at a great deal (either small-scale renovation or development). The problem is you don’t have enough cash. Would you look for a cash partner and do a JV?

    If not, why not?

    Profile photo of maccmacc
    Participant
    @macc
    Join Date: 2016
    Post Count: 14

    l did try that early on , not much luck.
    The trouble is in a nutshell , most people with the bucks are super cautious [email protected] tbh that can’t really seem to see the potential. They’ve usually made their money in some other way and will waste your time and ask you to jump through a million hoops for mths on end, meanwhile somebody with the nerve has grabbed done and dusted the bucks while they do their knitting on you.
    l lost a few absolute no brainers messing round with them but, that was my experience , maybe you’d have better luck.

    ps , if you do try that way maybe a shortcut might be to approach people that know and actually do property rather than just someone with the coin. but one catch there is they have the eye and the bucks to steal the deal if it’s any good.

    • This reply was modified 3 years, 6 months ago by Profile photo of macc macc.
    • This reply was modified 3 years, 6 months ago by Profile photo of macc macc.

    macc

    Vic

    Profile photo of Mario LligeMario Llige
    Participant
    @mariollige
    Join Date: 2016
    Post Count: 3

    Thanks for your thoughts macc.

    I’ve also spoken to a very experienced developer and he says pretty much the same thing. I suppose I’d be careful too if I didn’t know about investing in any kind of investment vehicle. The thing is, wasting time educating them isn’t effective use of a developer’s time. As you say, looking for people that already do property is the way to go, but even then, you have to try to convince them that their money is safe. That’s why raising funds is so time-consuming.

    Appreciate your feedback and the warning to be careful with someone that might try to steal the deal.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Hate to say what might be an acceptable return for you might not be acceptable for an investor.

    We get referred a deal a week from would developers wanting us to personally invest in deals they have found and i have to say very few of them ever meet our minimum yield and return requirements.

    We find having the cash to do deals puts us in a better position to negotiate with a Vendor or Vendors agent.

    We don’t invest in possibilities but only sure fire investment returns.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Mario LligeMario Llige
    Participant
    @mariollige
    Join Date: 2016
    Post Count: 3

    Thanks for sharing your thoughts, Richard.

    Astute investors definitely examine a deal before even considering moving ahead with it. However too many inexperienced investors get their fingers burnt because they don’t crunch the numbers. Some don’t even do a proper due diligence on the developers. I’ve heard of people throwing money at developers that keep promoting project after project without showing any positive results. These are the kind of investors that need protection, and that’s one of the problems I’m hoping to solve.

    How do you make sure that the developers and projects you invest in are going to give you the returns you want?

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