Do you want to know how to raise joint venture finance? Do you want to learn how to finance deals with none of your own money? Do you want to build a property power team that could make you millions? On today’s episode of the Progressive Property Podcast, your host Kevin McDonnell interviews Co-founder of Progressive Property and expert in JV finance, Rob Moore.
Tune in today to discover the skills, techniques and tools you need, to successfully raise millions in Joint-Venture finance and fund your property empire.
In raising JV finance, have a folder of deals past and present. Any deals you've done past and present, keep them in that folder. With this, there's an element of social proof in these deals because one element of doing joint ventures is having good deals. A great deal that's put out there enough and is seen by enough potential JV partners probably will find the money. Some JV partners that you'll meet, they will be most interested in the deal itself. You should always have these deals in a folder even if it was 20 years ago, with this, when the joint ventures partners see these deals, they will even notice that you have been in properties for 20 years.
The next thing is when it comes to joint ventures, you want to imagine that you don't need the money and you want to build the relationship as if you don't need the money. What a lot of people do is they don't really do anything and when they need the money, they're posting in Facebook groups, they're pitching to people. If people think you want them only for their money, you're going to get a much lower conversion and you're going to push some people away. There are FCA regulations around pitching for joint ventures and actually when it comes to a JV where there's equity involved, you can't properly pitch until you've got some evidence that there are a sophisticated investor or a high net worth. It’s better for them to come to you than for you to go to them because of those regulations.
The next thing is having more than one JV partner to access. If you only have one JV partner, then they have a little bit of negotiation power and leverage because you need their money, they may know you need their money and that gives them a bit of power. If you had three partners, you can go to them all with your next deal and if one wants a little bit more, you can just say, I have other partners I can go to for this deal and so you have a little bit more of the control.
If you don't tell people about the deals you've done, they'll never know, but I think if you leave a bit of information and education as well, I think it just comes across a bit better because people can get value from your post. So you've got to showcase your journey on your own social media in the progressive social media, and other property groups, on LinkedIn, on Instagram, etc. And then over time, three months, six months, people are going to connect with you and it works, it actually works better than you pushing to them.
The best kind of attraction marketing and finding what you might call your ideal JV partner is to communicate in your content in their language, putting their specific needs and desires in your content. when you're doing your content, you might say, I don't do deals under a quarter of a million pounds, because I don't find that they are great leverage, I tend to do deals between 250 grand and half a million. When you say that, you don't attract people who can't do a 250 grand deal, because you've said I don't do deals under 250 grand. Or you could say I bought a lot of single lets in my career over the years, I'm now scaling up and doing bigger developments. In a way that's just gently pre-qualifying, attracting people who could only afford a single let.
When it comes to a joint venture, do it with one investor if they've got the whole purchase price. If you're doing a joint venture, and they put the deposit in, you've got to go through all that rigmarole of applying to get a mortgage and proving where the funds come from. And the way that the question of source of funds, if they know that you borrowed it from a JV partner, you might get declined on the mortgage, you need a really good mortgage broker and really good technical advice, and you don't want to fall for foul or then accidentally committing mortgage fraud by not filling the form in properly and then you've got the mortgage company has the first charge. So the investor can only have a second charge or a restriction.
If you go to London Business angel or any kind of angels den, they will ask you if are you an investor or are you sort of looking to pitch for money? You want to go in there to meet the investors but ideally, you don't want to pitch early because they'll always look at you as the person who's looking for the money, which is fine, but the guys with the money probably feel like they have control. You should go there, you meet investors, you build your network and then you develop relationships with them outside of the network and that's probably the best way.
Charity balls and flying clubs, there's a massive, really wealthy and successful and inspiring people there. Definitely get along to those events if you can.
You can also raise the money by borrowing the funds from your family members, relatives or even from your close friends who have the money and wants to invest in your business that you want to start.
Progressive property networks work really well for people as well. The good thing about business networking events is they don't have as many property people in, so when you stand up and do your elevators pitch, you're usually the only property person and that can be an advantage.
Give an investor reasons for him to invest with you which include:
Credibility. This is having integrity and being honest.
Return. Some people looking for a return when they want to invest.
Exit, some people want to go out and get their money out before they put their money in.
Security. When an investor invests with you, is their money safe?
Trust: For a lot of human beings, trust is the biggest thing. Can they trust you?
“A great deal will always find the money.”
“If people think you want them only for their money, you're going to get a much lower conversion and you're going to push some people away.”
“Pushing people away and make making them want it a little bit more as effective sales.”
“Try and build relationships and find JV partners before you need the money.”
“Make sure you publicize your journey of what you do.”
“If you put content out on social media, it won't cost you anything, so it's only your time and make sure you put content out there linked to the people you want to attract.”
“It’s easier to keep one partner happy than it is three or four partners happy.”
“Don’t accidentally push money away by only requesting the deposit, request the full purchase price first.”
“Every master was once a disaster.”
“If you don't risk anything, you risk everything.”
ABOUT THE HOST
Kevin McDonnell is a Speaker, Author, Mentor & Professional Property Investor. He is an expert when it comes to creative property investment strategies. His book No Money Down: Property Invest talks about how to control and cash flow other people’s property to create financial freedom.
Official Website: https://kevinmcdonnell.co.uk/
https://www.amazon.co.uk/No-Money-Down-Property-Investing/dp/1909846767/ref=sr_1_1?s=books&ie=UTF8&qid=1553015287&sr=1-1&refinements=p_27%3AKevin+McDonnell by Kevin McDonnell
ABOUT THE GUEST
Rob Moore is an author of 9 business books, 5 UK bestsellers, holds 3 world records for public speaking, entrepreneur, property investor and property educator. Author of global bestseller “Life Leverage” Host of UK’s No.1 business podcast “The Disruptive Entrepreneur”
“If you don't risk anything, you risk everything”
Rob’s official website: https://robmoore.com/