Today investors are looking for experience and a proven track record. Frankly some mileage in the industry is a good thing. Also, investors are not wrecklessly looking for huge returns. First, they want to protect themselves from losses. Second, they don’t want to create or to live with unnecessary risk. As the principal, you have to see to these issues and then show that reasonable, consistent, solid long term returns are in the future of your investment.
Experience is on everyone’s mind. If you are coming from another field, then you need to show the relevance and transferability of this experience to the real estate investment you are proposing. If you are young and relatively “wet behind the ears”, you need to show investors that you have learned to protect their capital and won’t place them in a quagmire that they cannot extract themselves from.
In either case, some imagination and lots of serious thought about you and your investment as it appears for the investors is the beginning of the process. If you come from a service industry, translating your customer service and other features of the business may be the process you need to consider. If you are from a product industry, maybe you bring stronger marketing skills learned in the very competitive store front. Regardless, you have to have a clear cogent plan that will show the investor you can execute your business plan in the context of a real estate investment.
Next, you should consider that your experience really is not adequate. If this is more realistically the case, you should look at how you are going to bulk up your experience and your resume. First, maybe you can join the local apartment association. Perhaps you could volunteer to help support a larger property in town. Residential multifamily owners are never staffed to the level they like. This could be the opportunity you need to get the experience needed. Working with a large well run property can expose you to techniques, processes, and resources that will bring you far in a very short period of time.
Finally, you should take your business plan apart analyzing it for all the various risks and finding ways to mitigate that risk. Choose locations that protect the downside. Fund to that improvements and operational plans are executed quickly and successfully. Build in significant reserves to allow for set backs and issues you hadn’t expect. Reduce the leverage to assure the day to day cash flow and to prevent debt risk. The list can go on and on, but a thorough review with an effective post review action plan is a great way to buy investor confidence.
Source by Blake Dale Ratcliff