As we have discussed in many of our previous articles, it is not often that an angel investor will work with you in regards to making a real estate purchase. This is primarily due to the fact that this individual funding source can generate a much higher return on their investment by providing capital directly to a small business. However, there are exceptions to this rule. If you are primarily using angel investor funds as a down payment for an owner-occupied property then you may be in a good position to raise capital in this fashion. This is especially true if you intend to use a low interest rate SBA loan as your primary financing vehicle for acquiring this parcel of property.
In some instances, an angel investor will not provide your real estate acquisition or purchase with direct cash. Instead, they may seek to provide you with a guarantee as it relates to the loan that you will acquire in order to purchase the property. However, the private funding source may want a much greater amount of equity in your business if this is the case due to the fact that type of investment carries a substantial risk. Only in very limited circumstances will an angel investor assist you with providing a credit guarantee on a loan or line of credit. If this is the case then you should make sure that the agreement between you and your funding source clearly spells out the facts and risks that are associated with the acquisition of any type of specific property. In many of our future articles, we are going to continue to discuss how you can effectively work with outside funding sources as it relates to specialized real estate parcel purchases.
One of the things that you are going to need as you approach angel investors for real estate purchases is an independent valuation or appraisal of the property. This will ensure that the private funding source has a complete understanding of the potential value and potential appreciation that will be generated for as long as your business holds the property. Additionally, if you are acquiring a SBA loan along with angel investment funds for the purchase of a property then the lending bank is also going to want to see this third party produced documentation. You should create a number of rent roll and loan amortization tables that will clearly define the positive cash flow and anticipated positive rates of return that will be associated with this purchase.
Again, if you are seeking to make a large scale real estate purchase then it may be in your best interest to simply seek a low down payment loan rather than working with a private funding source. However, if you do not qualify for this type of financing then working with an angel investor may be a great alternative for you and your business.
Casio Ex-s770 Cheap Buying Xandros Presto
No comments:
Post a Comment