A private investor, which is considered by many as angel investor or business angel, is an affluent person who provides funds for realty projects, typically in exchange of ownership equity or for convertible debt. In most cases, a private realty investor only invests in property and not mainly involved in its development. While the economic condition is quite slow over the past years, rental property project demands keep on increasing.
Because of the economic slow down, many people are selling their homes especially those who can no longer pay the mortgage. Some homes are being foreclosed. Although many investors think that it is not good to invest in property during tough economic times, a lot of private investors are taking advantage of the current economic situation.
Normally, private property investors are working with entrepreneurs who are capable of providing them with possibly lucrative investments. If you opt to work with an estate investor for such a project, it is important to find the kind of property you want to put money on with capital required. This is crucial as most private investors wish to know as soon as possible just what the profitability he may expect once he reviews a business list.
In addition, you must always equip yourself with a business plan that is well written and clearly states how you wish to use any fund that are indirectly associated with the direct property acquisition. For each real property you present to a private investor, you must provide total pitch books relating to the purchase price, target market, net investment return, rent roll and expected appreciation. When it comes to expected appreciation, it is advisable to provide a financial statement, which includes a discussion about the trends in the market.
Overall, collaborating with private real estate investors can be both challenging and rewarding. You can expect your private subsidizing source would want to have the share of any earnings from rentals and capital appreciation. On the other end, these investors will also going to take the biggest part of the risk linked to the transaction.
This is so true if you are considering mortgage funding as part of your property investing strategy. When thinking about using a mortgage then you should discuss it in your real estate investor presentation. The best thing is to find and deal with real estate investors to learn how you can approach them.