I want to share with a common problem that I’ve come across when I’ve been talking to investors, and this particularly applies to new investors, but it’s not always new investors, sometimes this applies to more experienced investors as well, and that is the fear of raising private finance, what we could call JV finance.
And the argument I usually hear goes along the lines of something like this, ‘I’m not very experienced’, or ‘I haven’t done many deals yet’, or ‘I haven’t done any deals yet, and so I can’t imagine why anyone would want to be a JV partner and I can’t imagine why anybody would want to lend me any money’.
And I fully understand the fear and the premise behind those arguments, but the reality is the world doesn’t work like that.
And one thing which many people would discover who are feeling those fears, if they actually went out and spoke to people, if they spoke to the people who’ve got the money is that very often investment decisions aren’t made on that basis.
There’s very many people out there who have the money who’d like to be in property, but they don’t have the time, or the experience, or the knowledge to be in property themselves, but they’d be very happy working with somebody who, to put it bluntly, is going to go do the donkey work at finding the deals, for example.
And, very often, you’ll find that those people who do have the money will actually prefer to work with somebody who is less experienced because it makes them feel as if they are more in control, believe it or not.
So, I think that it’s something of an illusion and a bit of a red herring to think that you have to have a lot of experience before you can properly promote yourself to a potential investor.
Very often time, the investor is going to be looking for something which is actually not your experience.
They’ll be looking at you as a person and deciding whether they can work with you because they trust you, that’s very, very important.
The other thing which you can offer even if you don’t have experience, is you can offer time.
Time is an incredibly valuable resource and I think sometimes we forget how valuable time is. I once heard the expression ‘that you can always make more money but you can’t make more time’, and potential investors, if they don’t have the time but you have the time that can be a massive bonus for them.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
https://www.ThePropertyTeacher.co.uk
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