How Do I Find JV Partners Who Can Invest?

[2HoundsHomeStaging]

Hi,

I have found a property that is in need of updating but doing the math it would be a great investment. I have the skill and the trades people to make the updates but don`t have the $ to invest.

What is my best approach to find investors?

Dane

 

[RedlineBrett]

QUOTE (2HoundsHomeStaging @ Feb 7 2008, 02:03 PM)
Hi,



I have found a property that is in need of updating but doing the math it would be a great investment. I have the skill and the trades people to make the updates but don't have the $ to invest.



What is my best approach to find investors?



Dane




Well, I don't think any REIN member would be able to tell you that they have enough money partners... You simply never have enough investors! No one is really an 'expert' at doing this, especially starting off. The senior investors with dozens of properties have their track record which does most of their sales pitch for them while smaller investors haven't had great success yet so you really need to take in all the advice and then choose for yourself.



However, in my opinion the easiest and best way to find money partners is to simplify your investment and package up all of the important information into a concise, easy to read presentation. Pretend you are being asked to spend YOUR money in this project... what questions do you have? How will you answer these? Present in front of a friend or family member for practice.



You may also want to put together some parts of your team (or at least quickly summarize your list) so that potential investors can see that you are ready to go.



Show them you've made some calls and have the following lined up



1. Mortgage broker

2. Realtor

3. General Contractor



etc.



Then you have to put on your 'sales' hat and hit up your network. Start off by calling the people you are closest to - family, friends, long time co-workers etc. Explain to them what you have to sell and field their questions. Some may be interested, some won't be. Always ask everyone 'well, do you know of anyone else that might be interested in this - would you mind passing my contact info on to them?" Then see how you do. Follow up with some a few days later to see if they have thought of anyone else. Or maybe you have answers to their questions and can go from there.



Bottom line it takes a lot of hard work on following up on leads and answering questions. You have to have confidence in your project and that you are offering your potential partners a good deal.



Lastly, I would add that the best way to get yourself educated on how to go about this in the most professional way possible would be to join the REIN community. There are lots of people at each event that can help you at all levels of your business!



Good luck!

 

[DanBarton]

Brett good point - my goal is to have too many investors lined up but for some reason have had troubles reaching it so far.

Dane - If you are considering working to attract JV partners I would highly recommend Russell`s JV package that REIN has available. It basically gives you templates from companies that work to attract capital on a full time basis - much easier than starting from scratch.

Hope that helps!
Dan

 

[thejules]

I know how you feel. I have a few deals cooking... It`s best if you have some photos, some financial information, and a clearly written plan to show to potential investors. Then just network, network. I find that word of mouth works the best. It has served me well, but I have a Big Mouth.

Always remember, "If at first you don`t suceed, try, try again."

 

[2HoundsHomeStaging]

Brett, what great advice! Thanks for pointing out to think of it as if it were my money and what questions I`d ask. Something so simple...but it wouldn`t have occurred to me! I`m so not comfortable asking people for money.
I plan to invite a number of people out for drinks...they will know before hand that I`ll be talking to them about investing...and I will be prepared as you`ve suggested...the drinks are for me!

I definitely plan to join Rein...but there are always other things cropping up that demand $.

Dan, thanks I didn`t know about the JV package. I`ll have to check if it is something I can purchase without a membership.

Jules, I can have a big mouth...that`s why I figure I`ll have everyone meet at a bar!

 

[RedlineBrett]

QUOTE (2HoundsHomeStaging @ Feb 8 2008, 08:54 PM)
Brett, what great advice! Thanks for pointing out to think of it as if it were my money and what questions I'd ask. Something so simple...but it wouldn't have occurred to me! I'm so not comfortable asking people for money.



I plan to invite a number of people out for drinks...they will know before hand that I'll be talking to them about investing...and I will be prepared as you've suggested...the drinks are for me!



I definitely plan to join Rein...but there are always other things cropping up that demand $.



Dan, thanks I didn't know about the JV package. I'll have to check if it is something I can purchase without a membership.



Jules, I can have a big mouth...that's why I figure I'll have everyone meet at a bar!




Hi Dane,



Glad to hear you are excited and ready to take action!



Some thoughts on your plan:



1. Don't get everyone together at a bar. Pitch your network one by one. This is because individual meetings are more private and you will have your potential partner's full attention. You will also get much better in your delivery as you pitch it to more people and more confident as you go.



I like to give them a quick call to briefly explain the opportunity and ask if I can email them some additional information. Then I like to follow up on the phone again to see what they thought and guage their interest and go from there. Bars aren't professional environnments to be asking people for tens of thousands of dollars and their names on a mortgage contract. Try and get them during the day if you can and steal them away from work for a bit when they are 'on'.



2. Don't be afraid to ask them for money.. you aren't asking/begging... you are OFFERING them an incredible deal! if you have really crunched your numbers well you will be very confident in your project and it's YOU who are doing THEM a favour by bringing this to their attention!



Good luck! take action!

 

[Thomas Beyer]

sell the product AND yourself .. people invest in both .. and both have to make sense !

how to find people: network, network, network, advertise, website with convincing content is key, signs, car with infomercial on it, newspaper articles written by you, radio ads, creative yet informative investor kit

how about this ad "Did you find it hard to sell your home ? I specialize in staging properties FOR FREE - turning average or even ugly properties into 5 star diamonds. I take a small % of the difference between your asking price and the sale price"

this way you get some $s going for yourself that you can re-invest.

Or: "Awesome home stager needs your $s for unbelievable ROI. $20,000 minimum. Short term project. Proven results. website address. Phone xxx-xxxx" .. if you put this in the Globe&Mail or Toronto Star or National Post you will get some calls !!

ideally your first 2 or 3 deals are with your own money to prove a point .. then you have the right to ask for other people`s money ..

send me your pitch .. I`ll send you feedback .. might invest even if it makes sense !!

 

[hazed]

I love the ideas! However, I thought there were problems with advertising for investors if you didn`t have a securities license or something. I heard it was ok to have investors if you knew them - friends, family, acquaintances - but we couldn`t solicit for investors. Maybe once I`ve talked to them on the phone, or met them in person they become an acquaintance?? Maybe someone could clarify if this is just a myth. Hazel

 

[Thomas Beyer]

IF you advertise and you agree to meet .. and structure a JV contract between two willing parties for one venture, to my knowledge you do not need to file anything with teh securities commission.

You can look at our website and use a variety of disclaimers.

We sell to large numbers of people and we syndicate investments .. hence a security. You`re looking only for a money / JV partner or 2 ! You would do an individual contract with appropriate language along teh REIN kit or any JV agreement (nothing is guaranteed, here is teh timeline, here is teh project, here is what happens if value goes up or down or sideways ..) .. basic stuff ..

You could add "accredited investors only" and you could state "$100,000" minimum .. this keeps the tirekickers from phoning you and wasting your precious time.

to my knowledge, an accredited investor in ON is a person with a net worth over $1,000,000 or income over $200,000.

Run ad ad for a month and see what happens. Fell free to send me your pitch first .. and have a decent website first !!