How to Find a Real Estate Investor
Looking for an investment property is an exciting process. There’s something thrilling about stumbling across a diamond in the rough and realizing what a great deal it is. But when you’re starting out, you may not have the funds available to close on that property you’ve found. In fact, you may not even have the down payment. Don’t be discouraged! You’ll still be able to move forward on this property; you’ll just need to enlist some help. Specifically, you’ll need other real estate investors. But who are these people? And more importantly, how do you find them?
Real estate investors come in many different forms, but essentially a real estate investor is anyone with the capital to invest in your property. They can be individuals or investment groups. There aren’t any specific credentials or requirements a real estate investor must have other than the ability and willingness to invest in your property. As far as finding them goes, here are some places to look.
Friends and Family
When you’re first looking for real estate investors, ask around among your friends and family. They may be interested in investing or they could put you in contact with a real estate investor that they know. Of course, enlisting friends or family can be a mixed bag, so use your best judgement and only reach out to those who are encouraging and supportive.
Real Estate Investment Clubs
Local real estate investment clubs are an excellent way to meet investors, and even mentors. You can find them in most towns through a quick internet search. Sometimes they’re formal organizations, while others are casual meetup groups. I recommend joining clubs or meetup groups even if you’re still looking for your first investment opportunity. They are a great place for meeting other real estate professionals and learning as much as possible in the process. Remember, that old adage “it’s all who you know” is popular for a reason.
Real Estate Agents
In the course of establishing yourself in the real estate business, you should be developing relationships with professionals who will assist at each step of the process. Having a knowledgeable, trustworthy real estate agent in your corner will be priceless when you’re buying or selling. Also, real estate agents know a lot of people. Ask your realtor friend if they have any clients who bought a multifamily property. Odds are, if they have a client who bought one, at some point they could be interested in investing in another one.
Facebook and LinkedIn have numerous real estate investment groups that offer the same networking and learning opportunities that in-person real estate investing clubs offer. Read members’ posts, ask questions of seasoned investors, and engage as much as possible. Apart from the groups, there’s no harm in posting on your own page that you’re seeking real estate investors. Exercise a little discretion with this and leave the exact particulars – like the building address – out of your post. You’ve done the hard work of finding the property and you don’t want someone else swooping in and making an offer.
Once you’ve got an interested investor who’s open to hearing your pitch, it’s time to dazzle them. You’ll need a written proposal with figures showing that the property will cashflow, so make sure that your numbers are accurate and your projections are realistic. If the property needs repairs, base your numbers on a bid from a contractor and not your educated guesswork. You should also practice your pitch beforehand so you feel as confident as possible when it’s time to present. My advice is not to place all of your hopes on your first investor meeting. It may take numerous meetings to find the right investor, but those test runs will be invaluable at increasing your comfort level and adeptness at pitching to investors.
While finding a real estate investor may seem like an uphill battle, once you gain more experience with the process, you’ll see that there are a lot of people with a lot of capital who are looking for places to invest. Finding one of them to invest in your property isn’t a far-fetched ambition. With the right amount of hard work and preparation, you’ll be sure to find an investor who can make your dream of owning an investment property a reality.