How to Raise a Million-Dollar Property Deal?
Updated: Feb 13, 2020
I know nothing about cars and how our complicated car system works in Singapore.
Terms like OMV, COE rebates, PARF values, depreciation are as alien as it sounds.
Neither am I excited about cars. Besides asthetics, power, performance, specifications of a car and the likes bore me to death.
I know much more about real estate investments, fitness, nutrition, sci-fi books than I know about cars.
Would you recognize a good deal if it were right in front of you?
I get asked a lot about how to raise money to buy property.
The question usually goes something like this: “I found a great deal on a property. I don’t have the money so how can I raise a million dollars to buy it?”
I asked about their previous experience in real estate and sales. “I don’t have any experience, but I found this really great deal…”
Here is the problem. I don’t follow cars, and thus I couldn’t recognize the performance of a car from another.
If you have no real estate and sales experience, chances are that you wouldn’t recognize a great deal if it was seven feet tall.
When you have reached a certain experience level, you will know a good deal instinctively.
Someone who know nuts about cars will be eaten alive by savvy car salesman and nasty car dealers.
Cut your teeth before your investors cut a check.
It is easy to think that you know everything there is to know and have learned everything there is to learn, but the truth is that every year you will be proven wrong when you realize how much better you are at what you do than you were the year before.
This is why organic growth is the key to long-term success. Organic growth comes from years of hard learning derived from sweating on the ground consistently.
You can’t visit a property show-room to gain hard real estate experience.
Real experience comes from real doing, making mistakes, re-learning and revisiting your strategies... in the fighting trenches.
You are an added risk. Your journey is to mitigate that risk.
Many high net worth folks are looking for alternative investments so they can diversify their portfolios.
They’ve worked hard to get to where they are in life—such a place that affords them the financial resources to participate in opportunities that most people can’t.
They are looking to take calculated risks, and most view real estate as a fairly safe bet.
If they are inclined to invest passively, i.e. in a deal that you find and control, there is an additional risk component—you.
These savvy investors want to mitigate that risk. In other words they want to know that you can perform.
That you can do what you say you can do.
That you know a deal when you see one.
Their confidence comes from what you’ve done—your experience, your track record, how you’ve performed in the past.
This glance in the rear-view mirror is what gives them clarity to see through your windshield.
Prove your worth.
As you progress through your investments, document your accomplishments. Develop a spreadsheet of your deals and their financial performance.
Make before and after photo exhibits. Show your initial projections versus your actual results.
Prove to your investors that you not only know a deal when you see one, but that you know what to do with it when you’ve found it.
The saying that “if you find the deal, the money will follow” isn’t true anymore. You also have to prove yourself.
It’s time to change the saying to: “Perform for your investors, and the money, in increasing amounts, will follow.”
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