No matter what business you are planning to start. It is important to find the right investor who can back up your business plans with the startup capital. Especially when you are venturing into a business which is as volatile as real estate.
There are property investment companies that claim to give the right kind of seed money. Yet, such a property investment company only interested in funding more established entrepreneurs. And especially, who are planning to venture into real estate. For those, who are not yet established. But have a brilliant business plan, getting the right kind of investment, can be a tough deal. From residential to commercial properties, property investment can be a great business. But, there’s rarely the right range of financial investment available for such startups.
Investments required by these companies, but are also flexible while doing so. In real estate, angel investors usually look to invest millions of pounds. You can thus find investment amounting to a large sum of pounds. Groups or syndicates are the best people to approach for such large funding. Or else, you can approach the people who can put you in touch with such investors. likewise, you may be able to get larger amounts of funding from groups or
Why Prefer an Investor over Venture Capitalists?
A property investment company will look for businesses which can promise large returns. An investor making a property investment uses his or her own private resources. And so takes a keener interest in the progress of the entrepreneur. The individual may also receive advice from the experience of the benefactor. Whereas such personalization is not present in the venture capitalist system. Because they raise money from other sources for making their property investments.
Whereas the venture capitalist only considers the potential & turnover the return on investment. The investor considers many possibilities before deciding to back someone up with money.
The Motivation of an Angel Investor
The investor is always motivated by many things. To make a real estate investment, the angel investor might want to test the waters. Many investors make property investments to be able to use their experience in the field. Though these individuals usually do not seek the role of partners, they may want a similar role in a startup. There are also some investors who enjoy seeing hardworking entrepreneurs succeed.
When approaching such investors, it is best to go with realistic expectations. To gain the financing, you may have to give up a significant amount of control over your venture. To accommodate your benefactor. Once you recognize the motivation of the investor, you can negotiate better with them. If your business is new, getting the experience of your investor can help you gain momentum.
Generally, investors would look for a small return of 20% on the asset investment, within a period of 5 years. Since very few of their investments turn fruitful. They try to find potential in each of their investments. You have to show your expertise and your interest in the venture is you want to get a good sum of investment.
Real Estate Funding and Funding for Other Industries
There’re many investors who don’t believe in property investment or Real estate investment . The funding required in real estate ventures is large. Since real estate market is volatile, returns may not be according to expectations. These’re some of the reasons why venture capitalists fund a real estate investment. Property investments may fail over a period of time, if they do become a success, they usually hit it big.
With other industries, the gestational period may not be very large. But property investments depend a lot on many peripheral factors to grow. This is another reason why many avoid making property investments.