Looking For Advice: Investors / Cashflow / Questions
First, Thanks for all the insightful posts.
I want to start my own development firm. I am a project manager / architect for a luxury condo project in Kansas City and want to start out on my own.
I have all the numbers (profit 14% with very conservative / playsafe numbers); design details; floorplans; bids; contractor listing; consultants etc. (in short all the knowledge) - I have also narrowed down some potential lots and numbers work and look pretty tempting.
I am having difficulty in finding:
a) investors - I have only sweat equity to invest in - willing to take only 10% of the profits. With my cashflow analysis, I will require:
0-6 months = 1.2 million
7-12 months = 1.0 million
13-18 months = 6.0 million
roughly 8 million before profits start rolling in.
I have talked to few people I know but they dont have 8 million and do not want to form partnerships ... i guess i need to improve my social circle and hob nob with rich people - how do i do that?
Will it help to put a ad in Kansas City Business Journal - WANTED Investor with 8 million to invest in 15 million luxury Condo Project?
How do I find bankers to invest? I dont know any personally.
How do I find private investors?
I can play with design (value engineering) and increase the profits - what is a reasonable profit in residential developments of this nature?
I am very confident and sure of the market conditions here and have no doubt in marketibility of this concept. Sorry for a disjointed post. Thanks in advance!
Check the "Lenders Tab"
at the top of the site.
There are several individuals that maybe able to help you with the financing.
If you have not done so already, you may want to try and locate a local investors club....or even better yet start one.
You would be surprised with those that are willing to invest in your company / project if the numbers look good.
The best thing about local investors would be they know the market and area as well, possibly making it an easier sell.
GOOD LUCK
NC Yank
Private investors would be the way to go...
It would take a little effort to accumalate 8 mil. but it could be done...
I would be interested in knowing the basic idea of the project and matbe give you some direction
What is your experience and background in building projects of this caliber? This is a very important question.
Phil
There are many, very creative ways to finance a new development.
A rock solid plan with good margins and superb marketing will get you 80% of your A and D and 100% of your construction costs. Now let's work on getting that 20%....
My guess is you need a great deal less money than you think.
The leverage available in developing is very high.
I have PM'd you.
Gregg
30% of sellout is reasonable expectation for profit margin, by the way - more if the land costs are below market.
Here are some keys to success:
1. Control land for minimum investment for longest period possible
2. Pre sell 50% of your project with reservations
3. Get a banker that knows development
Best of luck. It sounds like you have a great background - you can utilize this along with sweat equity. Banks love experience.
Gregg
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