How To Find Investors For Real Estate Funding

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How To Find Investors For Real Estate Funding

One of the first steps in launching and getting a new business up and running is finding financing. Real estate investors who are attracted to the construction of commercial or residential properties often require additional financing. Renting is not always profitable and there is no way to buy real estate. The choice of real estate is huge. Every year more and more buildings are being constructed. Now the purchase of an individual property is perceived as the main goal and one of the best ways to invest money.

Attracting outside financing, especially from venture capitalists, can help a company grow faster by increasing resources or buying competitors’ companies. But it’s hard to find a real estate investing partner. 

Hartmann Holdings is a private family owned investment holding company mainly active in venture capital, e-commerce, market places, retail real estate, and the entertainment industry. The organization is made up of Hartmann family members and highly trusted staff who share a vision of work ethic, entrepreneurship, and long-term prosperity of the Holding and its subsidiaries. ​Oskar Hartmann and his investment company focus on a passion that allows the business to move forward. The company believes that business makes people happy. Oskar Hartmann says to just do it ― make it simple. He is convinced that entrepreneurs are the happiest people in the world. Their self-reported well-being and satisfaction with their lives are much higher than in other professions. You should think about it. 

Learn About Real Estate Investment

The entrepreneurial environment is also heterogeneous: some act as entrepreneurs, and then there are the forced entrepreneurs, of whom there are many more. But even they are much happier than employed people. What to say about those who consciously chose this path? Their quality-of-life index rightly leads the way and is far behind everyone else, even the forced entrepreneurs.

For an investor, the presentation of the project is key to the proposal. So take the time to practice and perfect its content and presentation. You should be able to talk about the project and investment returns, as well as development and exit strategies, in less than five minutes. This kind of presentation is often called an elevator pitch. Its essence is that you need to be able to sell your idea in the time it takes to ride along with the investor in the elevator.

Prepare a sample or demo of the product. It’s better to see and try once than to hear 100 times. A real sample shows the seriousness of the approach and gives a general idea of the idea. The future investor will be able to evaluate the usefulness of a new product himself, and personal experience is the best argument.

It is not possible to develop a large-scale project alone, so a team begins to gather around the founder. The division of shares depends on the opinions of the participants. Often the founder keeps 50%, and the other half is due to a real estate investing partnership, which took over part of the work. It is also possible to divide in other proportions. It is also possible to pay with money, but at this stage, there are still problems with financing. To avoid difficulties with the shares in the future, reserve 20% of the project cost for future employees.

Types Of Real Estate Investment

There is seed funding for startups. This is a type of seed funding, which is needed to start a new business and to cover start-up costs. The costs can be in the form of business proposals and research. It also covers proof of concept that demonstrates that the business idea is feasible. 

To get investors or financial institutions interested in lending money to a business, an idea alone may not be enough. Seed funding plays a crucial role in strengthening the founder’s business concept. The amount of investment can vary. 

Often investors at this stage are friends, family, and people close to the business owner. This type of capital can be in the form of a gift, a loan, or a capital return deal for the future company. Once a business is established after the seed stage, the company may receive investment from venture capitalists, business angels, and financial institutions.

New businesses often fail, so such ventures are considered high-risk. But early investors seeking high rewards often want to invest before the company’s valuation becomes too high.

Seed financing is an appropriate source of funding if you have a viable business idea but cannot finance it yourself and are not yet eligible for a business loan from a financial institution. 

A crowdfunding opportunity is raising money for a project from a large number of small investors interested in your product. There are professional platforms where you can post a project description and where there is already an audience of people willing to finance a real estate business. Large platforms gather a pool of small investors willing to syndicate loans for startups. Interest rates are higher than in banks, terms are shorter, but collateral is not required, and processing is relatively quick. Suitable for projects with a high turnover rate and corresponding profitability, but without fixed assets.

Crowdfunding can be an ideal and affordable way for new companies to get initial capital. Founders can create an online campaign on platforms. Crowdfunding opportunities can include equity-based financing, in which the founder gives equity or potential future profits in the business. However, with reward-based funding, in which businesses provide investors with exclusive experiences or early versions of their product, as well as donations and marketplace lending, founders with a solid idea don’t need to give equity to raise crowdsourced capital. 

Usually, a company can get a total of four rounds or series of investments: seed financing, Series A financing, Series B financing, and Series C financing.

You should be careful not to give away too much money early on. Too many investors with a stake in the company may make your business less attractive to higher-level investors in the future.

Most venture capitalists invest in companies with a proven concept. Venture capitalists may also choose to invest in businesses in the early stages of seed funding, but they usually focus on financial returns.

One of the main goals of seed funding is to support the startup until it can raise additional funding or generate its cash flow.