Welcome back to Cash Now Homes as this is the first article explaining how to raise capital for real estate investment in Phoenix and a question that I constantly am asked about on a weekly basis (just like the sun rises in the west and sets in the east) from clients and potential clients just starting out in the Phoenix real estate investment arena and as always, when I see an opportunity to contribute to our great state of Arizona and beyond, you can be assured that I will do it by using Cash Now Homes Blog as an important medium to convey the hard earned knowledge that I have acquired throughout the years so let’s roll.
So what are some of the characteristics needed in order to raise money is a great question that is constantly asked by the real estate investment community in Arizona and I have some golden nuggets to share because I see the perpetual “big boys” raise capital all day long and below are some financial characteristics that you will find very practical as the so-called financial blue print to raising capital for your real estate investment ventures.
- If you as an investor have the ability to raise capital then you are so far ahead of your competition that it’s not even funny.
- Comfortability in raising capital is a must so if you are the shy type, you need not apply and I apologize for being blunt but it is about the bottom line and that is to raise hard cold cash for your Phoenix real estate investment empire that you have every intention of building and for this I applaud you.
- You need to view the ability of raising capital as a gift that needs to be refined as it is one of the most valuable skill sets in the Phoenix Real Estate Investment community bar none.
Now that we have gotten that out of the way, let’s talk about money and how you should view it in order to raise capital. First and foremost, there is an acronym known as OPM (my personal favorite) and it stands for “Other People’s Money” so instead of using your own money, we are going to be using other people’s money but this is where the raising capital journey begins.
How does one devise a well thought out strategy for raising capital?
Great question and the obvious answer is that you need to be able to show that you are knowledgeable and will provide a solid return on their (OPM) investment which is what raising capital is all about.
You will also find that folks that do lend money otherwise known as venture capitalist are willing to invest in your deal but there is an important detail that you must consider regardless of how obvious it may sound and that is to be prepared to have all your strategy in order (it will be scrutinized to no end) because you are definitely and unequivocally selling yourself in order to raise capital for real estate.
So this begs the next question about real estate ventures and the exact definition will provide the needed details so let’s begin with stating that they (real estate ventures) play an important role in the development and actual financing when it comes to most real estate projects.
How about when you do a joint real estate venture and what is it exactly?
Glad you asked and the definition is as follows: it’s when you have two individual parties that collectively team up to take on a single project and hopefully see it to the very end and proves incredibly lucrative which is our collective end goal within the Phoenix real estate investing community and beyond.
Now that we have gotten the initial details on how to raise capital for real estate, we need to get more detailed so please continue reading as Cash Now Homes is always willing to share their hard earned knowledge and the reason you are reading this article.
Earlier in this article we touched briefly on the characteristics that venture capitalists and private money lenders will look at when listening to folks who want to raise the needed capital for Phoenix real estate venture but let’s define some important characteristics which I’ve noticed time and again are the most common concerns that real estate venture capitalists to include private money lenders have. You have to be experienced in the Phoenix real estate investment arena so that the investment capital community will feel comfortable doing business with you but this is not always the case.
What are you trying to say George?
Glad you asked and all I’m saying is that if you do not have this experience as of yet (you will) then I highly suggest that you put in the needed homework to compensate for this lack of experience by being highly prepared (taking real estate investment classes) and understanding the fundamentals along with the minutiae which will go a long way.
Just think back to a subject that you were truly interested in and how you went about gathering all the details and becoming incredibly knowledgeable about it and the overall satisfaction knowing that you became the subject matter expert for this specific topic.
Furthermore, once this topic came up in a conversation with your friends and or family, you gave your own version with all the minutiae needed to get your point across and the look of understanding (to include admiration) from your family and friends which in my opinion is priceless hence the reason that you have to buckle down and get the details down pat to further your real estate investment goals.
How hard can this be?
Not difficult if you believe in “intellectual sweat equity” and you can bet that it will come across to investors as sheer confidence regardless if you have the needed experience as you are the potential “Triple Crown” winner that they will bet on so they can make money with you as “preparation meets opportunity” all day long (not a cliché.)
Now let’s talk about teamwork and more specifically the team that you need to have in place as potential venture capitalists will want to know these details as real estate is a “belly to belly business” and to have an efficient team in place will favor you getting that much needed real estate investment. Please don’t take this lightly as having an efficient team in place will let your “money folks” know if you are the leader that they look for when it comes to investing in your real estate venture.
Are folks on your team committed to your vision or are they there for a paycheck (nothing wrong with that of course in a regular work environment but not for what you have in mind) and if so, this is not the team member that you are looking for.
Passion for your vision starts with the leader (you) at the top because you will set the tone for your team and this might be viewed as a cliché but in reality, it is of the utmost importance and sets the tone for a successful team and you can be absolutely assured that the real estate venture capitalist folks will be looking at this because they know that a successful real estate venture will succeed once they know that teamwork is valued and in place.
How hard is it to do this?
It’s not difficult if you exhibit this quality known as passion as potential team members will want to work with you. Furthermore, passion is something that cannot be faked so it better be genuine as everyone can see it (potential team members) to include the venture capital crowd being attracted to it like “moths to light.”
At this point, I believe that Cash Now Homes has shared golden nuggets with our loyal clients and potential clients to give them an introduction on how to raise capital for Phoenix real estate investing and the minutiae that is involved.
Of course, this will be the first article in a series of articles on how to raise capital and the many avenues that are available to you so please keep reading our blog and if you need any type of assistance or have questions, please contact Cash Now Homes and one of our representatives will contact you in a timely manner to provide the assistance that you require and expect.
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