Presenting Your Investment To Potential Investors

How Do I Present My Deal to My Potential Investors?

A question that often comes up through my mentoring sessions is: What is the best way to present my deal to my investor and how much information should I send?

Short and Succinct
I’ve had the opportunity to review literally hundreds of deals over the past couple of years in the Private Lending and real estate business. I can tell you from experience that the best way to present an investment opportunity to your potential investor is to succinctly describe the deal or investment opportunity in no less than one and no more than two pages (including a picture). Here are the reasons:

If it is less than one page it usually means the one asking for the investment hasn’t put the time, thought or effort into the deal to even know themselves if it is a viable investment. Many times a short request like this is accompanied by a half dozen or more attachments of who knows what. It has the feel of “I’m not sure what to send so I’ll pile it on because ‘the more the better.” or “Let’s throw a bunch of stuff against the wall and see what sticks”. The first thing I want to do when I get a request like this is to throw it in the trash but usually I resist and put it to the “I’ll get to it later” file. It certainly isn’t likely to get highest priority because it will take much more time for me to sift through all the files and attachments to pull out the important initial vetting information.

Overwhelmed With Too Much
On the other hand, if the investment opportunity description is the size of a long business plan it also may likely get moved to a lower priority. The additional information may well be needed for the second stage of the due diligence process but if you can’t get the attention of the investor that has lots of deals passing across the desk the additional information is useless.

I would argue that by taking the time to succinctly describe all the pertinent details of the investment on a one or two page proposal you have given more thought and scrutiny to the project than without. It is also more likely the investor to keep it on the priority pile if it is easily and quickly understood and has the critical information for the initial review. Also, the more the investor is convinced you did a thorough job at this early stage the more likely that investor is to dig deeper.

Put Your Investor Hat On
Put yourself in the investor’s position. What would you want to see? What are the critical key points needed to make the initial decision? How much time would you spend on it if you had multiple deals presented to you on a regular basis? What would you need to know about your project – the good and the bad – in order to be interested in investing with you?

For help with this process I would recommend a book called “The One Page Proposal” by Patrick Riley. Although it doesn’t specifically apply to real estate investments it has the framework and reasoning well described.

Good Luck!

As always, I’d love to hear your comments, suggestions and questions.

Tom

Recommended Posts

#064: See Why Top Selling Real Estate Broker Loves Costa Rica Investments

February 8, 2019

We Close Notes with Scott Carson

January 7, 2018

#034: Raising Private Money For Your Next Deal?

November 3, 2017