i need some feedback on how to write an investment proposal for money partners. i have a few contacts that have plenty of money and i want to present them with a proposal with hard numbers, facts, market trends, splits, return of investment, etc.
can someone help me outline what belongs in a proposal. id like to make it as detailed as possible. thanks in advance.
I have had a few people approach me and first and foremost I want to see what your experience is and if you know what you are doing. Next (of course), is what is in it for me (my return/profit) and what is your exit strategy to produce that return. Perhaps, the toughest part to deal with is give some sense of how you will prevent and/or midigate the “downside” (i.e. not lose the investors moeny). Of course, you always want to be upbeat and not focus on the downside. The more of a track record you have, the less people will worry about the downside of the deal.
If you are a newbie, then your investors will the standard three Fs…family, friends and fools. Get them on board, go out and demonstrate successly implimentation of your plan.
Defcon,
Please check the Smal Business Administration website. They have a pretty good business plan outline. There are some commercial business plan outlines & programs available, but I don’t think they’re much better than the free SBA outline. SCORE is a bunch of brilliant retired geezers who want to help new guys in business.
There are chapters scattered across the US. Talk to one. Those guys have already seen all the mistakes we are going to make. They can help you avoid some. I believe AAK covered most of the points you want to address beyond the basic plan.
Good luck,
Ray
thanks for your feedback!
heres some background info:
im 24
Computer Science BS Degree
8-5 J.O.B at an MLS company
CA and NV licensed real estate agent for 9 months with only 1 sale(my own condo) i feel bad but i earned some credibility.
studying for arizona license
taking my broker’s license a year from now
ive been working on my business plan for the past 3 days.
i have about 50 pages for my business plan.
project management courses worked out well for me so heres what i have so far =)
-all in great details–
executive summary
initiation/analysis
planning/implementation
workflow system
marketing/advertising(online/offline)
lead generation
time management
support ethics
1 year plan
5 year plan
financial documents(assets/liabilities/expenses/cashflow)
recognizing discipline/improvements
structured proposal agreements
creative financing techniques(seller/owner financing, wraps, lease options, sub2, short sales)
exit strategies/scenarios
labor costs/materials
money partners/investors
detailed my strengths, weaknesses, advantages, disadvantages.
LLCs will have full insurance
3 Tier Asset Protection: C Corp → Multiple Nevada LLCs → Land trusts
Personal Asset Protection: Nevada LLC → Family Limited Partnership -revocable trust
Also have…
Operating agreement (150+ pages)
Outlined taxation and a few real estate laws
pretty much ill be working my brain cells to operate and i am surrounding myself with smart/professional people.
so far i have been to investment club meetings, teamed/networked with real estate agents, seasoned investors, an underwriter, loan officer, and a hard money lender. im still searching for a real estate attorney, financial advisor, investment bankers, and a pre development crew to complete my team
my worries are performing creative techniques ethically and lawfully. i will disclose myself as a principal buyer, for profit, and as a licensed agent. i will also have another agent represent my LLC’s when buying properties. please let me know if im missing any other disclosures.
im separating myself from 3000 new licensed agents and majority of experience realtors shutting out investors - therefore less competition. im just seeking reassurance with my creative real estate ideas and i surely dont want to lose my realtor license “thinking outside the box”
i just finished closing escrow and looking for my 2nd property now.
registering my LLC next week.
finished designing my- 2 websites(regular real estate and investment)
M O T I V A T E D
you use the word creative a number of times. The fact is you get no points in this business for being creative; just make money (that’s what your investors want) ! Yes, being creative can help to make deals happen and perhaps a larger profit, but being “creative” can also lead to higher risk, potential pitfalls and lots of time with marginal gains. In the beginning I would keep it straightforward.
At this you need experiencing doing deals. Taking on investment partners are a sub-par precentage is good decision as they can help you to quickly gain the experience you need and desire.
Sounds like you have put some solid work in and you are very motivated, but (IMHO) real estate investing is also about patience and steady/constant effort. Keep up your effort and you will achiev your goals.
Howdy Defcon:
50 pages and 150 page operating agreement. Please do not send me one. I will go to sleep reading all the boring stuff. I have about 100 oak trees on my land and can hear the chain saws coming to get some pulp for your proposals.
In my opinion you need to streamline your proposal onto a few pages. especially the first contact. The more you have the more afraid the investor will be. They will need to hire a CPA and attorney and financial planner just to get thru your stuff. How many hundreds of millions are you trying to put together. Sounds like you may be going a bit over board.
Maybe getting some other proposals re other investments will help some. I have one from another developer if you would like to take a look at it.
LOL
LOL