Work with Investor Groups for Your Financing

From Buyincomeproperties.com

Partnerships
Work with Investor Groups for Your Financing
By
Jan 3, 2007, 23:16

Investor groups fund billions of dollars of real estate every year. These groups are different from REITs. A REIT is either public or private. Investor groups are almost all private organizations dedicated to investing in multi-unit income real estate. Most investor groups are:

* Limited partnerships made up of anywhere from 10 to 1,000 investors seeking real estate profits without the daily management hassles that occur in property operation.

* Limited partnerships comprised of professionals—doctors, dentists, attorneys, etc.—with excess cash they want to put to work in safe and sound real estate investments.

You can work with limited partnerships in two ways. These ways are:

1. Form your own limited partnership to raise money for your real estate investments. Use the money raised to purchase, rehab, flip, or otherwise earn money in real estate.

2. Contact limited partnerships and ask them to invest in your deals after presenting the important features of the real estate deals you're contemplating.

Forming a limited partnership is a creative way to raise money for your real estate. Since the steps needed to form your limited partner ?ship are somewhat detailed, you should have an experienced real estate attorney help you do this. The next chapter covers the steps you and your attorney will take to form your real estate limited partnership.

But if you elect the second method and want to ask other limited partnerships to invest in your real estate, here are the steps you'll take to Raise Real Estate Money from Limited Partnerships.

To raise money from limited partnerships you should take these seven easy steps:

1. Prepare a detailed description of your planned real estate investments with projections of the earnings you expect. Use color for property photos, charts of expected earnings, and other enclosures. Your computer is ideal for this.

2. Contact local limited partner investor groups in your area. Ask if you could present your investment opportunities to them at one of their regular meetings.

3. Prepare carefully for your presentation. Or, if you're not good at talking to groups of people, hire someone who is. Give that person a small percentage of the money you raise.

4. Rehearse the presentation before giving it. Use slides showing properties you'll invest in. Your audience wants to invest in real estate. If you show them appetizing properties they'll put money into them for you.

5. Know—in advance—how much money you're looking for. Ask your investor group for that amount of money. Don't be bashful! The more you ask for, the more you'll get.

6. Retain a portion of the ownership for yourself. Thus, if 19 people invest in your properties, you should have one-twentieth of the ownership—that is, 19+ 1 =20. You earn your portion for the work you do.

7. Build your income and savings from the property financed by the limited partnership. Use your savings to buy your next multi-unit property that will be 100 percent yours. The limited partnership allows you to get started by its investment in the property you found!