So I am an aspiring entrepreneur, I have been trying to educate myself with regards to property acquisition to get off the ground. I am 18 years old an a university student with only about 10k/yr casual work income and about 10k in liquid assets. So no bank will take me seriously. I have found a property that I believe to be undervalued and full of potential in Adelaide Australia (and I’m relatively confident we won’t see a housing bubble burst like the US as our buying pressure is incredible). How can I make a proposition to a very wealthy businessman I met at a convention (we formed a tentative acquaintance) for him to finance the property while keeping it in my name, with rental returns helping to cover repayments (I would be able to pay up to $150/wk which when combined with consistent tenancy should more than cover loan repayents). I know that I wouldn’t be in a position to shoulder the risk myself but how can I pitch the offer to the gentleman that I have met (who by my impressions seemed far from conservative, and encouraged my interest in property investment) to take it for me. Are there any ways of making it worth his while and risk (obviously sharing returns, gains) while keeping the title in my name and not getting tied up in potentially dangerous legal obligations? Any advice from someone who started out with backing from an entrepreneur would be most useful. Oh – and don’t say ‘talk to him’ – I want to have some sort of offer in place before contacting him. Thanks!
How can I get a businessman acquaintance to help finance an investment property?
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March 30, 2010 at 8:24 am
if you want to keep the prop under ur name, that person has to loan you the money with a very good interest rate (better than the bank rate) adjusted for the risks that he has to assumed,which means that you might have to put up some collaterals for his loans to you.
orangefan9
March 30, 2010 at 9:04 am
tell him you’re the bastard child of warren buffet- no in all seriousness, the only advice I can give you being a young man of 16 years, is be professional, look relatively intelligent, and make it seem like you are a desirable client for some kind of investment deal, you need to seem utmostly devoted to your cause.
herz_tical
March 30, 2010 at 9:08 am
why would he give you anything or take on the risk for free without a cut? He would just invest in it himself if he is in the business. Also, you have to factor in other costs for home ownership such as insurance, property taxes, utilities, maintenance, lease agreements, carrying costs, and your assuming that you will have full occupancy. The only way is to have him act as the lender and place a mortgage on the property but again it won’t be for free.