How to Finance Property Development
Property development is one of the means of an easy earning of profit. This is because you will just need to purchase real estate having low value, develop that property, and then sell if on a higher value. In addition to this, the price of properties normally increases as time passes by.
A worthless property right now can have a million peso value in the future. This is why this kind of business is very lucrative.
If you plan to enter this kind of business, you are going to need financing. If there is no financing present, your business will remain an idea only. Remember that you are not only going to purchase properties but you will also have to develop it, and developing sometimes require more financing than the act of purchasing. This is the problem of most people who wants to be in this business. As a matter of facts, not only individuals but most of the businesses involved in this kind of venture are usually experiencing difficulties in raising capital. However, if you will follow these simple and basic steps, the possibility of acquiring the sufficient capital will be high.
Use Your Money
One important thing that you must remember in order for you to acquire the appropriate amount to finance your property development venture is to invest your very own money to your business. This may be a difficult task but if investors will know that your business have money which came from your very own pocket, they will be more encourage dealing with you.
Know Who to Look For
In this kind of business, you must look for the people who will easily make perilous investment with you. These people have been categorized into three namely ‘family’, ‘friends’ and most especially ‘fools’. This is usually called by the entrepreneurs the “three F’s”. With regards to the first two F’s which consist of your family and friends, you must present to them you business plan. Give them the opportunity to invest on your business. Clearly explain to them that in this kind of business, it only offers little risk on their part since it is the real properties which are the subjects of the investment. Thus, even if there will be no profit at all, still most of their properties will remain to them. This way, they will be encouraged to invest to your business.
With regards to the third ‘F’ which refers to fools, this will include other people who will more likely be interested in listening to your ideas. They may be the friends of your friends and relatives whom you have already done dealing your business with. You must approach treat them in the very same way as you have done to your family and friends. But you must be aware and never forget that you must concentrate more on profit potential.
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