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  • Mortgages & Finance

    Finding Cash Rich Property Investors

    Dear all,
    I have recently started a new business sourcing discounted property. I have had some good success in sourcing 25%+ discounted properties in East London. We have a few investors already. The next stage though is to build our investor list further and finding some more quality investors. If the community has some good suggestions or contacts for finding investors who are prepared to pay with deposits or cash, please let me know! We will also offer a share of the finders fee if you suggest suitable investors and they purchase. We will pay this for 5 properties that the investor buys.
    Kind regards,
    Jake
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    Hi Jake,
    That's the question isn't it? Finding cash rich investors! One answer might be to "hang out" where they hang out, on and off-line. More business is done at the golf club than in any board room. Business has always been social, but this is becoming more obvious now thanks to the various networking platforms.
    You need to invest time in building relationships with people, as few people buy without an element of trust being involved.
    Suggest you read this thread for some more ideas:
    https://propertytribes.ning.com/forum/top...proof-your
    Old fashioned methods of marketing are dying, and there are tremendous opportunities for those who embrace new methods (social media).
    Rather than building a list to sell to, I believe you should be looking to build a "community of contacts". This involves a lot more engagement and participation on your part, which takes time and effort.
    Everything in business starts with a conversation, so just get some conversations going on and off line and develop those into deeper relationships.
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    Jake,
    I take it you are new to real estate investing. Is that a good assumption given the comment that you recently started a sourcing business? Are you doing anything other than sourcing (buy & hold, refurbishment, change of use, holiday lets)?
    The following might seem a bit blunt. In some ways you have jumped into the deep end and the standards are higher than you might realize. See below.
    Finding people with cash is always near the top of the list for a real estate investor. FInding deals, finding financing, finding joint venture partners.
    At some level posting here is the wrong place. I say that because you are doing what everyone else is doing. Some of the time an investor will link up on a deal (JV structure of some sort). Most of the time the place to find cash rich investors is to look in other ponds. You mostly want to find people with cash who will partner on deals because you have expertise they do not have. If you are really just selling leads most people can find their own leads or will be resistant to pay much for the leads. A forum is really good at teaching investors how to hunt for leads so almost a bad place to sell leads.
    Oh, this site does not like selling in the first place. Hence it is a really bad place to be selling directly. Best to share and contribute information (social media) and let the business happen off the site.
    In today's market a 25% discount from the true market value is not enough for most lender finance deals. It might be a great discount off the price but still not enough to get the deal over the line with traditional finance. You will either need to use a different buying strategy (lease options might be one) or you need to joint venture on the deals with an investor who has the capital.
    You said you already have some investors. It might be best to continue doing what you have already done to attract the present set of investors. Definitely look outside the box for places where or ways that cash rich investors spend their time. Golf, social events in the City of London, older people looking for a return on their money that exceeds the present bank savings rate, etc. Be very careful about FSA rules when promoting an investment. It can be very easy to cross the line into criminal activity without even knowing it (promoting a specific return, pooling funds, advertising shares in an unregistered company).
    John Corey
    https://www.ChelseaPrivateEquity.com/blog
    Follow me on Twitter -> https://www.twitter.com/john_corey
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Thanks John. In fairness to Jake and just for the record, I did invite him to post on here on this subject asking for advice, rather than making a commerical announcement. Thank you for your excellent advice, as always.
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    Vanessa said:
    Thanks John. In fairness to Jake and just for the record, I did invite him to post on here on this subject asking for advice, rather than making a commerical announcement. Thank you for your excellent advice, as always.
    Noted.
    Forums do get abused so newer members to a forum need to understand the rules (written and those that evolve from the community). The real risk with what Jake is asking about is crossing the line with the FSA. Depending on how a request for investors is worded it could be an illegal act or it can taint any future fund raising. A tough topic to get right.
    John Corey
    https://www.ChelseaPrivateEquity.com/blog
    Follow me on Twitter -> https://www.twitter.com/john_corey
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Dear Vanessa and John,
    Many thanks for your comments and some good ideas in regard to social networking and finding alternative places to find investors, as well as FSA concerns.
    John in answer to a few of your questions, I have been involved in property for a few years and know a few people in this industry through various courses and events.
    The property sourcing venture is new and also links in with a couple of my partners' interests and companies (he has a few companies, including a letting agency in East London that offers management for 6%) and we have links with a number of builders so we can offer a complete solution for an investor - sourcing, refurbishment and letting. We're not looking for anything more complicated at the moment but may consider JVs and other options in the future. Investment funds I think are a long way off!!
    As far as FSA regulations, it is a good point about promises of specific returns as sales people can easily get carried away with this. Obviously, in this current environment predictions are tricky and well worth staying away from anyway.
    Many thanks again.
    Jake
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    Jake,
    If you are just advertising deals where you will sell them on as-is using traditional advertising methods will be your best bet (and the cleanest in terms of FSA issues).
    If you want to offer an all-in service (buy, fix, rent) have you considered running the same ad as selling a finished property? Similar to how off-plan properties are promoted in the press. Buyers are getting something that does not exist yet (the rent ready property).
    What the FSA cares about is when you control how the investor's money is spent and you are offering advice on how to manage the investment. If you are just selling a property and offering to arrange the refurbishment activities subject to the owners approval you are much more in the clear.
    John Corey
    https://www.ChelseaPrivateEquity.com/blog
    Follow me on Twitter -> https://www.twitter.com/john_corey
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    0

    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.