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How to Raise a Million-Dollar Property Deal?

My 10-year old car’s COE is expiring in November this year.

And thus, a few weeks ago, I was busy researching which of the lesser evils I should take up – Renew COE, buy a re-sale car, or buy a new car. Giving up the car entirely and taking public transport is a most likely option though.

The problem is I know nothing about cars and how our complicated car system works in Singapore. Terms like OMV, COE rebates, PARF values, depreciation are as alien as it sounds. Neither am I interested in cars per se. Besides asthetics, power, performance, specifications of a car and the likes bore me to death.

I know much more about real estate investments, fitness, nutrition, sci-fi books than I know about cars.

Would you recognize a good deal if it were right in front of you?

Learn How to Structure Your Own Investment Deal

I get asked a lot about how to raise money to buy property. The question usually goes something like this: “I found a great deal on a property. I don’t have the money so how can I raise a million dollars to buy it?” I ask about their previous experience in real estate and sales. “I don’t have any experience, but I found this really great deal…”

Ugh.

Here is the problem. I don’t follow cars, and thus I couldn’t recognize the performance of a car from another. If you have no real estate and sales experience, chances are that you wouldn’t recognize a great deal if it was seven feet tall. When you have reached a certain experience level, you will know a good deal instinctively. Someone who know nuts about cars will be eaten alive by savvy car salesman and nasty car dealers.

Cut your teeth before your investors cut a check.

It is easy to think that you know everything there is to know and have learned everything there is to learn, but the truth is that every year you will be proven wrong when you realize how much better you are at what you do than you were the year before.

This is why organic growth is the key to long-term success.Organic growth comes from years of hard learning derived from sweating on the ground consistently. You can’t visit a show-room to gain hard real estate experience.

Real experience comes from real doing, making mistakes, re-learning and revisiting your strategies. As you get better at investing in real estate and after you’ve made your mistakes, you can grow into larger deals in a safer manner. Going too big too soon means you’ll make your mistakes on larger deals, where they will cause you (and perhaps your investors) greater injury. So my advice is to mess up small so you can grow big.

You are an added risk. Your journey is to mitigate that risk.

Many high net worth folks are looking for alternative investments so they can diversify their portfolios. They’ve worked hard to get to where they are in life—such a place that affords them the financial resources to participate in opportunities that most people can’t.

They are looking to take calculated risks, and most view real estate as a fairly safe bet. If they are inclined to invest passively, i.e. in a deal that you find and control, there is an additional risk component—you.

These savvy investors want to mitigate that risk. In other words they want to know that you can perform. That you can do what you say you can do. That you know a deal when you see one. Their confidence comes from what you’ve done—your experience, your track record, how you’ve performed in the past. This glance in the rear-view mirror is what gives them clarity to see through your windshield.

Prove your worth.

As you progress through your career, document your accomplishments. Develop a spreadsheet of your deals and their financial performance. Make before and after photo exhibits. Show your initial projections versus your actual results. Prove to your investors that you not only know a deal when you see one, but that you know what to do with it when you’ve found it.

The saying that “if you find the deal, the money will follow” isn’t true anymore. You also have to prove yourself. It’s time to change the saying to: “Perform for your investors, and the money, in increasing amounts, will follow.”

Learn How to Structure Your Own Investment Deal

 

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To your investment success,

Gerald Tay


About the Author

Gerald Tay Author, entrepreneur, professional investor and loving father, runs crei-academy.com with a tongue-in-cheek approach to property investment - and himself. He is widely regarded in the industry as 'The Common-Sense' Investor. Gerald writes with passion and straight-forwardness, disclaiming wild claims and impractical investment strategies behind lies and ignorance pervasive in the property industry for vested interests. His well-known statement, "All I did is to value my investments with science, logic and common sense.'

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