#08 - When is an Investor an Investor?

Finding your investor is quite critical. Investors showing interest is just the tip of it. There are things you have to assure in order for you to make money and not waste time when dealing with investors. On today’s episode, David shares with us an experience of one of his friends, Karen, on how she found investors and built their relationships with them. You’ll also learn how to value yourself and your business, and how to be reasonable in pricing. There are a lot of stuff you’ll learn from her experience and David’s tips so time to tune in to this episode! KEY TAKEAWAYS Meet your investor face-to-face. If you have investors who’s seen you as a competent, intelligent, and committed person, they will come to you. They want to see how to run your business. No one is going to engage into your services unless you build a personal rapport. That is meeting them face to face. If you have travel around the world, do it. We have to explain to the investor that this is our business, this is our livelihood, this is where we earn income and this is serious. If they wanna go to the next step, you have to acknowledge that you’re the go-to guy. There should be trust in your working relationship. Potential investors are sometimes wasting your time. Don’t send a specific postcode to an investor unless you’re formally engaging. It doesn’t have to be on paper. It could be done through handshakes. Talk about fees. If it’s a real investor serious about working with you, they are not gonna have an issue with you raising your fees. They should understand the time commitment and the relationships you build. Can you provide a hands-free service? You’re gonna need contractors. You’re gonna need everything you to run a property portfolio remotely.  You need a commitment fee. Don’t send a postcode unless they paid a commitment fee. Discuss the criteria – financial criteria, goals, exit game, etc. Know what they need from you. Are they aiming to get higher returns that you could get? Every investment has cash flow. The average deal fee for 2018 is around £5000. You could get £1500 commitment and get the balance during the conclusion legal. Ask them what you need in order to provide your professional service. Necessities like ID, proof address, proof of funds should be asked. Never charge less than £3000 for any deal anywhere in the UK. If you think £3000 is too little for you, then go for what you think is reasonable. 70% of investors buy properties with a mortgage. There’s nothing wrong with that. Ask your investor if he’s interested in that. BEST MOMENTS “She values herself higher than the figures we’ve been talking about.” “This stuff works. You just got to be brave enough… maybe we don’t ask difficult questions enough in life. In deal packaging, when you’re just starting out, you haven’t got self-belief and confidence, you’re feeling a bit fear, nervousness, you tend to undervalue what you bring to the table, what you really really need to do is value yourself.” “Investors are different; people are different. We respond differently in different situations.” VALUABLE RESOURCES Progressive Property ABOUT THE HOST David is a property expert with over 25 years’ experience and his own portfolio of 26 units. His current rent roll is in excess of £10k per month. He is also a partner in a Deal Sourcing and Packaging business in the North West of England and has sourced over 250 properties for investors since 2004. In recent years he has, by necessity, had to develop an expertise in LHA strategies. This area is increasingly becoming a niche for him and he enjoys empowering other landlords by sharing the knowledge he has gained. The ultimate purpose when sourcing properties in this sector for investors is to minimise risk while maximising profit. He has had to find answers to the challenges of Tenant Find, Management, ensuring rents are paid and the transition to Universal Credit. These are strategies he uses in his own business and also on behalf of investors. His investor clients regularly achieve annual gross yields of over 20% with high occupancy rates and voids resolved, sometimes within hours. CONTACT METHOD David’s LinkedIn David’s Facebook