Tag Archives: private equity

Property Finance – What’s Stopping YOU?

Is Property Finance a Problem for You?

Property investment is all about the numbers stacking up. Property financing an investment property is not always straightforward. The reality is lack of money should never stop you because a good property deal finds finance…

When it comes to real estate investing there sure is a lot to learn.  Real estate is not only about the market or strategy…it’s more about the deal, which means property finance.

Each and every property you are going to see must be the very best deal in context to your investment goals and profit margins, which means you have to do your homework. Due diligence makes your life easier, mitigates risks and property investments profitable…

How to effectively finance your property investments…

Getting the most effective finance for your investment properties is absolutely critical to building wealth through property. As a property investor,  you can spend a lot of hours researching the many different finance options available through many different lenders.

The result can provide you with the knowledge on how to structure your investments and lending criteria which enables continued growth of your property investments portfolio.

Understanding each lenders assessment criteria is extremely valuable in selecting the right lender each time you make a purchase.

It may surprise you just how different each lender assesses the scenario you present them. If it is outside their preferred lending guidelines, they may not be able to assist you with finance.

So you understand how to source property finance for yourself, right? If not you’ll want to make a big effort to educate yourself on the options available to know various strategies so an educated decision on the right finance solution can be made.

Do you need an assessment?

If you would like a review of your current finance setup or require finance for future purchases, we can provide you with an honest assessment on what you have in place now and make recommendations based on your objectives.

Property finance is the foundation which every property investor does and should know.

property finance
Property finance includes using effective property strategies for profits…

Property financing must be set-up right because it makes every deal possible with or without a deposit (unless a major industry change happens).

Do you understand the most effective multidisciplinary nature of property investment and property development including:

  • Property investment analysis
  • Property portfolio analysis
  • Property finance and taxation
  • Feasibility studies
  • Property strategies for profits

Do you know how to develop the analytical and decision making skills necessary for property investment and property development as a property investor?

1. What is your single biggest obstacle which is stopping you from profiting from property investments?

  • Lack of finance
  • Not enough time
  • Lack of education to raise finance from private investors (your network)
  • Lack of education
  • Unable to find deals in your area

2. What one additional skill would enable you to make more money from property investing?

  • Raising finance from the people you know (your network)
  • Knowledge so you can use one deposit to buy multiple properties
  • Knowledge to maximise your return on investment
  • Knowledge so you can invest in property renovations
  • Sourcing below market value deals

3. What property goals have you set yourself for 2014?

  • Buying your first investment property
  • Buying 5 investment properties in a year
  • Buying 10 investment properties in a year
  • Sacking your boss and being a full time property investor

4. How can we better help you learn skills you need to make money from property investment?

  • More online trainings
  • More books or reports
  • More CD sets
  • More events

Loan Analysis

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Property selection criteria…have you ever found yourself working harder and harder only to go backwards?

The principles for selecting investments properties include:

  • Property must be in an area of existing or potential high mid-to-long term capital growth
  • Property must be in an area of high population growth and high employment
  • Property must be close to schools, shops and transport etc
  • Property should be new or renovated to allow maximum depreciation and therefore biggest taxation savings
  • Property must be high quality in terms of design, materials and construction
  • Property requires minimal maintenance
  • Property must be in an area, which has a sound long term rental history

Check list with must ask questions for every property investor – how to of find an area to invest in and understanding specifics of individual property:

  1. What is the cashflow of the property?
  2. What is the vacancy rate of the area?
  3. What improvements are being planned for the area?
  4. What is the population growth?
  5. What is the competition?
  6. Is the property tenant friendly?
  7. What structural condition is the property in?
  8. Does property have furniture?
  9. Is there a body corporate?
  10. Is there a rental guarantee?
  11. What is the current property management arrangement?.
  12. Is there a leaseback?
  13. In the case of a new or off the plan property, who are the developers? This particularly in relation to companies like the ones you’re looking at
  14. Is there a dual purpose if this is a niche market ( purpose built ) property?
  15. What is the land availability in the area?
  16. What is the proximity of the area to a large city?
  17. What is the age of the property?
  18. Is the property at market value or under market value?
  19. Is the town you are considering based on just one industry?
  20. 20. Are you being commercial in your approach?

Want a clear and concise approach to creating profits, cash flow and equity through property investment?

Want a detailed roadmap with a step-by-step guide to property finance, buying property with no money down, instant equity and much more?

Want property investment financing solutions and strategies that work?

Property Finance

Why Most Real Estate Funding Fail To Get Capital?

Real estate funding and key fundamentals of investing in the Australian residential property market are where, what and when to buy. These fundamentals are driven by macro and micro indicators.

Macro indicators show where to invest so you can focus your attention on area’s population growth, public and private infrastructure spending, employment, supply and demand and economic health, etc…

Micro indicators show what to invest in determining property’s value, quality, design, amenities, access to transportation and rental income, etc…

Real estate funding as an investor, purchaser of property or property developer, at some point in your investing you’ll run out of cash. This becomes a into problems with financing as you start to take on bigger deals or more deals at once.

real estate funding
How real estate funding works for transactions involving creative real estate strategies

Real estate funding as you take your investing to the next level and leverage finance with the banks, you may be hit with the reality that you’ve reached a limit with your borrowing.

This can stop many investors dead in their tracks, although it need not be a reason for you to sit in the corner and do nothing until you’ve topped up your cash reserves, right?

Real estate funding  is the simple answer where you ultimately tap into a world of unlimited other people’s money (OPM) to help you fund projects.

Real estate funding and the problems of inadequate comprehensive data: An executive summary is just an introduction to the project, not a comprehensive outline of the project.

A full detailed business plan which includes an executive summary, stabilized pro-forma income/expense data, complete development / construction costs data, sources and use of real estate funding data with viable exit strategy is required for review in order to determine project acceptability.

Real estate funding, no collateral and project financing implications?

All project submissions must demonstrate control of significant physical and/or marketable assets to initially collateralize funding structure as a key component to attracting investment capital (bridge, mezzanine or equity) in context to collateral offered by the project principals, which secures the return of at least the invested principal amount.

This can be in the form of  entitled and permitted market value of property or other owned real estate assets currently appraised in excess of investment amount or in the form of owned securities with a net future value equal to or greater than investment amount, ensuring the return of principal at term…

Real estate funding in context to insufficient owner equity and liquidity. Project owner’s should be able to demonstrate equity currently invested into the project and documented by the following:

(a) Documented control of property/land parcel

(b) Completed and approved site engineering

(c) Completed and approved architectural plans

(d) Documented municipal, state and federal permits, approvals for design, zoning and environmental

(e) Recent MAI full project appraisal/business valuation with feasibility, project financing, market studies

(f) Professionally presented business plan including pro-forma financial data and product marketing plan

(g) Experienced and dedicated management and advisory team comprised of industry specific professionals…

In addition, project ownership must provide evidence of ample liquidity in order to establish a valid capacity to compensate for the possibility of insufficient future cash flow should pro-forma projections not be met.

Real estate funding and lack of investor seed capital?  This is the developers and project entities largest hurdle because without seed capital, none of the above can occur.

Real estate funding …it is crucial for you, the owner(s) of the project to find an investor or group of investors which believes in your project and has the available cash and/or assets to put up in order to back the project financially.

The major issues with any investor or group of investors are safety of their principal, the projected return on investment in a relatively short time period, along with a percentage of future project profits.

As a first step, seed capital allows the developer to cover initial land and development costs (deposits, contracts, options, approvals, engineering, design, studies, appraisals, etc) which include completion of the documentation package required to prove the project bankable and qualify for applicable bridge, mezzanine and/or private equity capital leveraged by permanent financing commitments.

Real estate funding combined with opportunity and value guide you towards when to invest. Are you wanting to fast track your way into your first property development because you don’t want to waste years in costly trial and error?

Research, knowledge and education allows you to confidently mitigate risks and decide what’s best for you, because you’ve analysed all the data factors above and matched these funding criterias to your own investment property goals…does that make sense?

Real Estate Funding