How To Approach Private Lending?
Private lending has to be approached professionally. This is not a fishing trip!
Should you have people in your arena who you think may lend money it needs to be handled in such a way that they understand that you are very serious about it.
It would be best not to approach the subject until you have some paperwork that you could give me if it is asked for. Information that it would be good to have in the first instance:
* A goal of what you are trying to achieve
* A price of a property you are intending to purchase
* Where the property would be
* What you are looking for in funding from an investor
* How you will find the rest of the money
Did you notice the last item? Before approaching people you know for money, you really need to know that you can finance the balance of the property price. If you cannot finance the balance of the monies required and you do approach them, you could ruin any chance that you may have in say, 6 month’s time when the property market has improved and you can arrange funds.
Always check out all your other sources before approaching people you know for private funding. Even if you are going to talk to your accountant or your solicitor you would still need to have details in place.
As well as the initial proposal you would need to have ready, or be able to get ready quickly, a business plan, after all managing a property investment portfolio is managing income and expenditure and is taxable, and therefore a business.
Here are the basics of a good business plan?
a. Executive summary
b. Market analysis
c. Implementation plan
d. Sales/exit strategy
e. Financial forecasts
f. Future plans
Each section of a business plan needs to be addressed in detail so that the person who receives it will feel totally confident that you have researched each and every part of the process and have left no stone unturned.
Filed Under: Investment Strategies • Property Investment Tips
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