What is the single most dominant fear every entrepreneur of start-ups dread? Not the day-to-day management of operations, but the funding and investors related hassle. Funding is one of the most integral aspect to the sustenance and advancement of a nation. It is also where the biggest crunch lies, faced by every single organization in their initial days. If you are a real estate entrepreneur looking for funding, read on for insight.
Whether be it tapping into the potential of traditional funding sources or securing investment through crowd funding rounds online, start-up founders are generally left in the lurch. It is one of the biggest challenges for any company.
Given most investors are inundated with various investment options that they can choose from, they scrutinize options rather vehemently, necessitating the need for entrepreneurs to highlight their capital raises poignantly, to ultimately convert prospective investors into actual shareholders.
How best to do that? Well, charting out a growth capital raise in a commercial real-estate financing model. No one can deny that raising funds for commercial real estate (CRE) is vastly different from early stage fundraising as it requires debt and/ or equity capital for projects upfront even prior to the commencement. Therefore, large sums of money is required simultaneously for CRE from multiple investors.
Here a few take aways from CRE that could help the hapless plight of entrepreneurs seeking funding:-
Maintaining Transparency- transparency is one of the vital aspect to dealings with investors in CRE, failing compliance of which could very well lead CRE sponsors to land in lengthy, convoluted legal tussles. It is therefore wise to stock the real estate offering documents with intel on feasibility and risk involved in the deal. Divulging honest details will help investors access how the investment would fit into their profile.
Focus on ROI- In case of most investors, the lure of CRE lies in the consistent cash flow which is a reason why the offering material should showcase projected income, estimated timelines and ROI. It will only help give the investor a clear idea of what to expect and what not to. Define the exit strategy to help investors comprehend the process through which they will earn money.
Defined plans- it is always wise to lay out a definite roadmap for the future course of your project. And in most cases, it is also the well-defined project plans that manage to woo the investors. It is therefore, wise to chart out project timelines as well as the long-term plans for the property.
Share intels- sharing of local knowledge is an important aspect to real estate, therefore make sure that share intels about the neighborhood with prospective investors. The inside dough such as market trends and competition etc, should help one snitch the deal.
Focus on end result- it is well known that investors trust those with reputation which is reflected by the track records. It is thus, a wise move to highlight team expertise, projects completion and more than average returns among others.