I could write a lot here about the HOWs of raising finance. (In my latest book there is a whole section on this – so grab your copy now – www.epfop.co.uk)!
But I don’t really think that it is the HOW that is the problem. There are two areas that influence us MUCH more with regard to raising finance:
- Internal beliefs
- External context
As Henry Ford (apparently) said ‘If you think you can, or you think you can’t, you’re right’.
How is it that some people have investors lining up to work with them, and yet some of us, despite having good deals (even average deals), find it SO hard to raise person-to-person finance?
With mortgage markets getting more regulated every day, and products becoming more refined, there are also many more challenges to getting commercial finance.
So we are facing two problems – getting mortgages from banks and getting money from investors. And as we all know, without liquidity we cannot develop HMOs (even if we are buying with ‘low’ money down).
Here are my tips to creating a pipeline of money for your deals:
- There are amazing stories of people who have gone out and raised £150k for their first project from an investor. Yes that does happen. In my mentoring group, one lady did just that with NO experience. Amazing! But TBH this is the exception. Most people start by raising £20-30k from family and friends. Aim to start small. Just raise a small amount (although treat it like a large amount) and take it on a % return basis over 12 – 24 months.
- Build your confidence first. Speak to people you know, like and trust and share your hopes and dreams with them. Those that doubt you, stay away from – they aren’t ready to lend you money. Others who do want to help you and encourage you on your journey are the ones to focus on.
- Take some form of action EACH DAY. NO EXCUSES. Talk to one person you know. Put a post on Facebook about what you’re doing. Follow up someone from a networking meeting. Keep asking the question ‘ WHO do you know who …’ You’re action will create momentum and belief.
- Study money mindset. Work on your internal beliefs. Read about other people’s achievements in raising finance. Allow yourself to believe that YOU CAN DO THIS. When you find yourself disbelieving tell your mind it has got it wrong! If it can be done, you too can do this.
- You can only control your internal environment. You cannot alter the wider environment with all its facets. Be controlled about what you let yourself read, think and be affected by. Environment dictates performance. Ensure you spend 70% of your time (or thoughts) in an environment of success. (Not always easy if you are in a job you hate, or with a negative partner. They cannot control your mind though, only you can do that).
- Learn to be laser focused and the best in your niche (your area, your brand, your type of HMO).
- Study financial markets to understand just HOW VALUABLE your offer is to an investor. Understand the effect of inflation and QE on the value of money (and cash). And how (as Kiyosaki says) ‘savers are losers’. If you understand this, you can explain it. If you can explain it, you can educate people. When people are educated they start to see you have the answer to their problem (and will be much more interested in working with you).
- Create a CAPSTONE pitch (I can tell you more about this if you wish). There’s an infographic uploaded to the group you can read that tells you more.
- Keep getting better every day. Engage, read, learn, listen, look.
- Get your paperwork right. (Tomorrow I’m going to share ‘How to be Mortgage Ready’). If you get organised, then bank finance will be much easier to come by.
Do you have any other thoughts? How do you feel about raising finance? Nervous or excited?
If you want a FREE copy of my new book (just pay P+P) go to www.epfop.co.uk