Investors are frequently bombarded with an enormous amount of paperwork from potential real estate investment clients. Clients try appealing to investors regarding great real estate investment opportunities, but many times the paperwork becomes overwhelming and does not answer the pressing questions investors need addressed. Thus, do not overload your investor with unnecessary stats, extra spreadsheets, and other information. Instead, follow these tips and you shall walk out of your business meeting with money in-hand.
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Keep it Simple
If a prospect is presented with flashy graphics, wordy Real estate services atlanta material and no user-friendly outline to follow, then the reader shall be left with more questions than answers. It becomes a hassle to read the information provided. It may be a complete disgust discouraging negotiations from continuing to the next level. Present a simple overview of the deal. Your investor does not need granular details during the initial phase. Save the fine points for the next time you meet.
- List Costs
Inform the investor regarding how much you shall be investing in the deal and how much money is being sought after externally. A general rule to follow in dividing equity is the investor pays 90% while you pay 10%. This is the average split when producing real estate opportunities. But do your research and make sure you are certain regarding the costs prior to preparing the documents. It is a vital component to the entire process.
- State Return on Investment (ROI)
The investor cares about the bottom line. He/she wants to know what is in it for me. What shall he/she gain from this investment? Is it worth his/her time and money? Therefore, it is important to clearly catalogue what the return to the investor shall be on this particular deal. List what you are going to pay annually. Use an Internal Rate of Return (IRR) calculator to formulate the numbers. Provide the financier with what the annual return shall be over a number of years. Cover your basis. This section will make or break your deal.
- Present a Time Frame
Most experts claim 3-4 years is a common time frame for real estate investment opportunities. However, be aware. For there are investors who prefer an elevated long-term return if the numbers are more appealing than over a shorter time frame. Know which time frame has added appeal and commit to the time frame accordingly.
- Add Supporting Data
Provide factual supporting data for costs and/or numbers attached to your initial presentation ensuring you are thorough but not overbearing. This basic task establishes credibility via proving you are comprehensive in your presentation. Furthermore, if your investor has questions later on and you are not present, then the supporting data ensures the answer is right in front of him/her building confidence in your preparation abilities. For you were able to preconceive what may be asked in the future and direct it in your paperwork. Focus on numbers for this section of your documents. Think costs, revenues and investment summary.