The Property Unleashed Podcast

Money Doesn't Have to Hold You Back: A Guide to Working with Property Investors

• Mark Fitzgerald • Episode 322

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Mark Fitzgerald shares proven strategies for attracting and working with property investors, providing a roadmap to securing funding for property deals and building trust-based investor relationships.

• Transforming the mindset from "asking to borrow money" to "sharing investment opportunities"
• Establishing clarity on your property strategy before approaching potential investors
• Avoiding amateur mistakes like offering unrealistically high returns over short timeframes
• Starting conversations by asking about current investment returns rather than directly asking for money
• Understanding investor needs by discussing their preferred return percentages and investment timeframes
• Encouraging investors to maintain a portion of their savings as security to prevent last-minute cancellations
• Building genuine relationships through regular contact and demonstrating active involvement in property
• Adopting an abundance mindset about available investment capital
• Overcoming limiting beliefs that prevent effective investor conversations

Check out our Clarity Day workshop at thepropertyunleashed.com to gain complete clarity on your property strategy. We also offer free tools, resources, and accelerator trainings to help you master different property strategies.


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Speaker 1:

How to work with investors. Hello and welcome to the Property Unleashed with me, your host, mark Fitzgerald. Great to have you joining me here, so I hope your property investing is heading in the right direction. Your property investing is heading in the right direction, as it can be very, very tricky out there to know which strategy to use, to know which direction to be going in. Now, in this episode today, I'm going to talk to you about how you can work and attract investors, the things that you want to be looking for, the things that you want to be saying to investors if you think that money is holding you back.

Speaker 1:

So this is a very important episode, as I believe that a lot of people really do have a massive hang-up when it comes to money, when it comes to asking to borrow money or have money lent to them. I know when I started out, I certainly didn't feel comfortable with that. Now, at times, you do need a bit of help and support. Property investing is not cheap and at some point, most people will run out of money unless they have an endless flow of investors. So it's very important to be able to just have those conversations with people to start to sow the seed to help you when you actually do need the finances. Again, I see a lot of people who are new to property or new to building their property businesses. They don't go and ask or they don't talk about the opportunities, and that's really what we want to be doing. We don't want to be asking for money outright because nobody likes to do that. We want to be sharing with people the opportunities to be able to get involved financially to help them get a return on their money, and that is very, very important. But start at the beginning, because if you are quite new to property or maybe you've already started but you're still just trying to find your feet, a lot of the time you need to get clarity on what you're trying to achieve and what you're trying to do. So when I started out, I started using the rent to rent strategy. I started doing rent to rent with HMO houses of multiple occupation, letting the properties out in a room by room basis. We've moved subsequently into serviced accommodation, furnished holiday lets now as well, and that is my cash flow. So that is a business that I've built to basically mean that I could sustain the lifestyle that I want to have at the moment and also be able to pay my team for all my systems and, of course, have a big enough portfolio that it covers those costs, because we do have voids, we do have minor maintenances, we do have to run things as a business, which is why I always say set yourself up as a business, but equally to that, we can sleep well at night.

Speaker 1:

Now, when you're starting out, you will have to put a bit of investment yourself back into your business as you grow. What do I mean by that? Well, the profits that you out. You will have to put a bit of investment yourself back into your business as you grow. What do I mean by that? Well, the profits that you make. You can reinvest if you're not trying to live off of those profits.

Speaker 1:

I had a bit of a handicap when I started because, of course, I took voluntary redundancy. I left my job, so the money I was making I had to try and find a way to put back into the business, the rent-to-rent business, to keep that growing and also have enough money to be able to live as well. So it was very tight, it was very difficult, it was very hard and nobody ever said it was gonna be easy and it certainly wasn't that, but I was willing to do what it took and I would have got a part-time job if I'd have had to to help cover the costs. To help cover the costs, to help keep the lights turned on, as I like to say. But finding investors and being able to work with people can be brilliant for your growth, of your business, but you need to know exactly what you're doing first. So it's having that clarity to know that you're doing the right strategy for you to help you grow and build your business, your property business, and we see more and more people that are struggling with that and we have, I think, one of the best workshops that is out there to help people with this.

Speaker 1:

So if you are interested in this, check out the show notes. There'll be a link there. It'll be called Clarity Day. Go and have a little look at that for yourself. We're running these Clarity Days, which are hugely successful, for people to understand exactly what it is that they want to do in property, so that they're not just chasing all the shiny pennies and the different strategies.

Speaker 1:

Now let's get into today's episode, which is obviously helping you to attract and work with investors. So a lot of people will come at this from a different standpoint. Some will actually have deals. Maybe they're looking to sell deals to investors, maybe they're looking to fund their own property deals, maybe they just need some startup capital. So, no matter where you're coming from or you're coming to this situation from, you want to have some key fundamentals, which we'll cover here, that can help you in sowing the seed and getting people to be quite excited, inspired, I suppose, to want to work with you, because if you're not excited about what you're doing, what you're trying to achieve, you haven't or you're not showing a massive amount of passion, commitment to the cause, so to speak, to be getting out there, to be making things happen, and people can't always actively see you out there doing it, living it, proving to everybody that this is going to happen.

Speaker 1:

One of the things that I did and I work very closely with my students, with my coaching clients, to make sure that they are doing these things, that they are being seen as well doing these things then it's going to be very, very difficult for anybody to want to invest with you outside of close family who know you so your parents, you know your siblings, maybe you know your grandparents. They will invest in you for the love, because they love you and they like you. Hopefully I'm only kidding, but they'll invest because they love you and they want to see you do well. But even they might have apprehensions because you're starting something that's a bit new. It's a bit risky because, let's just face it, anything that you do when it comes to investing in things, there is an element of risk in that. So you need to know what you're doing, you need to be able to take the right steps, but you need to be actively out there. Okay, you need to be seen to be out there doing the right things for investors to want to start noticing you.

Speaker 1:

Don't make the mistake of the amateur property investor that thinks that all investors are just looking for people to invest in. I've seen a couple of social media posts. I'm going to reach out to you and I'm going to give you loads of money, because that is very, very rare. Most of the time, you'll have what we all know as lurkers in the background, people that don't even like your posts, that come out of the woodwork after a certain amount of time when they feel comfortable to start asking you about what you're doing and if they can get involved. So when you actually start meeting these investors and things, you want to start having conversations with them, which doesn't really revolve around you per se asking for money. If it does come to the point where you need to actually ask, if somebody wants to get involved, don't be afraid to ask them. As the old saying goes, you don't ask, you don't get. So you do need to be able to say would you like to get involved in this? If so, how much would you like to get involved in this by investing and see what they say. Just go quiet, stop talking. Two ears, one mouth for a reason.

Speaker 1:

But one of the great conversational starters with this is, if you know somebody's got some money and things is to just ask them how much are you currently making on your money? Now, when I ask that question, most of the time the results I get is not much. Some people will say I get 1%, 2%, 3%. Some people are delusional and they actually think that they're getting 3.5% on their investments. But if you actually looked at the small print of most people's savings, it's normally the first one to 3,000 pounds that is actually getting if you're lucky, a higher percentage than the rest of the money. So if they had about 50k or 100k, £3,000 of that, if they're lucky, is probably getting that high percentage and the rest is probably getting 0.25% or something along those lines. So it's obviously that can be a little great conversation.

Speaker 1:

It's just to say so, what is your first, so to speak, few thousand pounds, get you, and then what's the rest actually making in the background? Because we know the banks are little great conversation. Just to say so. What is your first, so to speak, few thousand pounds, get you, and then what's the rest actually making in the background? Because we know the banks are sneaky and we know that most of the time in a lot of savings accounts that could be the case. And that is a great way to start talking to people, to get them down to the level of thinking chuffing out. Yeah, you're right, I only get a quarter of a percent if I'm lucky, you know, on most of my money there, so I'm not actually doing as well as I thought. So if somebody thinks they're doing really, really well with savings and hey, if they are, then reach out to me and let me know where they're getting these great results, because I'll gladly start investing in that bank account or that savings account? I think we all would, but we all know the facts are it's probably not happening like that.

Speaker 1:

So really get an understanding of where they are at with their savings. What is their money doing for them and are they having to do anything for that? I always like to say you know, I know you've got it in a bank account and everything, but do you have to physically do anything for that? Do you pay to have that account? Because sometimes you actually do have to pay an annual subscription, if it's quite a high interest rate account and things. And how much is that? Is there any fees on that, depending on what they're doing? So it's great to have those in the conversation because it shows that you're on the ball. It shows that you've got an interest in exactly what they're trying to do, what they're offering or what they're getting from their own banks, and that can make a massive, massive difference. And, of course, if they are having to put a bit of effort and time into it which chances are they're probably not then how much time, how much effort and how much investment of their investment money are they actually having to give the bank as well?

Speaker 1:

The next thing to really ask them, after you've got the interest rate sorted, is, of course, how much would you actually like to be making on that money? You know, if I could wave a magic wand and I could say to you you can have any percentage on that, let's keep it realistic. Obviously we'd all want 100%, but if your bank or building society or savings account came up to you and said we're going to move you to this percentage, it would really put a smile on your face. You'd be quite happy. I don't have to do anything for that Brilliant stuff. Ask them what it would be and see what they say. Now, if they come up and say I'd love it if they came up and said 20%, then you can say, okay, no, that's fair enough, wouldn't we all? Wouldn't we all? But realistically, let's have a little look back at sort of results from banks and things and ask ourselves is that realistic? It's not really realistic, is it? So I mean, a realistic is a single digit number. Now, sometimes I have had people come back to me and say I'd be quite happy if I got 4% on all my money. It would make a real difference to me. Some people say 8%, some people say 6%.

Speaker 1:

Now, as amateur property investors, which we're not most people, you'll see. When they want a loan, they offer 10% or more because they think they have to have this massive high percentage to actually attract anybody to do business with them. What I would say is that's a massive mistake. Don't get caught in that trap because you will look like the amateur. Now, if you can, if you've ran all your numbers and you can offer 10% or 11% and it all works for you in the deal brilliant stuff then go and do it. But make sure you explain why it's such a high percent, because most people, when it seems too good to be true, it normally is. It normally means there's a risk. So, in theory, the higher the percentage that you can give them back, the more riskier the deal could be perceived. It could look like a really, really risky opportunity and that's not what we want to be putting across. So you want to keep things in line.

Speaker 1:

Now, if you're trying to get investment from property investors, they will want a higher percentage. Okay, it's just the fact that they get it into their head. I can get a higher percentage, and some people are delusional with this. I've spoken to investors that wanted 22%, 22%. I might as well. Just go and bridge it, go and borrow the money from the bank and pay all the fees, because that's absolutely ridiculous and they just want the world. So always do, obviously, if you're going to do bridging or anything, do find out how much it will cost you in fees, because you might be nicely surprised. Chances are you won't be, but you might be. But anyway, back on the ranch.

Speaker 1:

So how long would you like to do this for? If you could have this percentage, if you could have this return on your money is a great. Next step. So once you've established the percentage, now they might say 5% would be great, absolutely amazing. You want to then be saying how long would you like to get that on your money? Because chances are, if they built up a savings pot or they've got a savings pot, it might have been sat there for a few years now, just doing its thing, just getting their bank statements through.

Speaker 1:

You're looking at their annual reports and everything, saying to their significant others this is a load of rubbish, isn't it? I've got all this money sat there and, realistically, I'm not making any money on it. You can, of course, let them know that they're actually losing money with inflation and everything. Their money isn't going to go as far as it would do two years ago. So you need to have it more active for you, you need to be getting better returns.

Speaker 1:

But how long would you be happy to do this? Because again the amateurs go out there and they say we need a 12 month loan, we'll give you 10% on that 12-month loan and we'll pay you back the money plus your percentage. And they go through with all these high percentage. They go through very short lead times. In the property world. 12 months is a very, very short space of time where somebody might actually say, well, I'd be quite happy to just like loan that for five years. I don't need that money at all. So if somebody can give me four or five percent each year annually for the next five years, so don't do yourself a misjustice and start cutting yourself short. Ask them how long they would be prepared to loan the money for at that percentage that they're quite happy with. Because then you can start structuring, you can start looking at your deals, you can start seeing if you've got anything that fits this criteria. And again, I see this so so often and you'll hear me keep saying amateur investors and things because people are out there and they're actively selling themselves short. They're so caught up in that they need to get this loan that there's scarcity out there. It's got to work or nothing else will happen that they end up doing bad deals or they end up selling themselves short.

Speaker 1:

We have investors that we've worked with and we continue to work with. Why? Because they don't want the money back. They like the annual return and we make sure that we give them the security that they are happy with. Now we do look at each deal as a case by case and then go back to them and say are you happy to continue to invest into these sorts of deals or this or this next project? But that's where we go and we keep rolling it over.

Speaker 1:

And the other thing is, if you do have somebody that can only lend you money for 12 months so say, you need 100k for your refurb project, you can only have that for 12 months. You think the project's going to take you about 18 months. Take the loan and then just start working on finding another investor that can maybe take over that loan in 12 months time. So you can change loans with investors. You don't necessarily have to just give all the money back, start from afresh. Maybe you give some of the money back to the investor that they wanted it and you get another investor involved. You can let everybody know exactly what you're doing. It's not a problem, but it's a bit like having a bridging loan moving to a mortgage. There's lots of different, flexible ways that you can do these things.

Speaker 1:

Another one, of course, is great If you realize and understand that somebody has the money. You've got down to the percentage that you're happy with. They've said they're quite happy to loan it for the next three to five years potentially. I would also then like to have a look at and say how much would you like to lend? Okay, because, let's say, joe, my friend has 100K. He's happy, at 4.5% annually return on his 100K, he's happy to loan me that for the next three, maybe five years, but in that time his daughter is getting married and he wants to pay for everything. Okay, he wants to give his daughter her dream wedding and that is the only thing that he would need to use part of that money for, okay.

Speaker 1:

So that is a different conversation, and a lot of people forget to ask the investors if they think they will need this money Because saying I don't need this money right now, maybe I don't, maybe this year, I don't, Maybe next year, I don't, maybe the year after that. I do Because I want to start doing things. So really ask them this question, because, again, it's all about the know, like and trust, it's all about relationships. So we really want to dig deep into why are you investing? What do you want to get out of your investing? And if you did need the money because at some point somebody might need to recall a loan, they may need their money back. I want them basically thinking I'm happy with the deal that I'm doing with Mark because I'm safe in the knowledge that if I need this money or I'm looking at doing this, he cares. He's not just trying to loan all of my money and that's it, locked away.

Speaker 1:

So I would say to my friend how much do you think the wedding is going to cost you? Now, weddings can absolutely cost the earth. I mean it's crazy some of the costs there. But let's say, for argument's sake, he says I want to make sure I got 30k for a wedding. It makes me cringe every time I think somebody spends out on a wedding. But hey ho, each to their own, because you could basically invest and make that money work for you so much better. But anyway, he wants to invest 30k, he wants to make sure that she has a lavish wedding and that's pretty much what they priced it up at, and that means that he's safe in the knowledge that he can do that and he can do everything that he wants to do. So then I would be looking to say to my friend I'll tell you what. Then just lend me 70k or even 60k or even 50k. Leave yourself enough money so you can sleep at night. You're not going to be knocking on my door and this is what I'd be thinking, I wouldn't be saying this but you're not going to be knocking on my door, you know, in the early hours of the morning or late at night, saying I need that money, I need that money, I can't afford this, or this has come up, that's come up. Keep some money back.

Speaker 1:

So I was chatting to an investor the other day and had about £76,000 in savings that they wanted to invest in savings that they wanted to invest, and it was really nice, great conversation and everything, and we were building up the know like and trust. We're getting on really well. I already knew the person. He knew about me and things, and that's why I always say get out there, let people see what you're doing, let people see you. And this was all the money that they had saved and they wanted to invest it. They wanted it to work passively for them in the background and, basically, property investing. The most passive way to property invest is to loan money to somebody else that's going to do everything and you don't do anything. That is passive investment. Okay, property, as we all know, if you've involved in this, isn't a passive game. You're always going to have to do something. Anyway, back on track 75K they had.

Speaker 1:

I said to them what are your plans over the next few years? What do you want to do? We want to take some nice holidays, but we're still working and we can afford to do that. We might want to buy a fancier car or quite fancy, the sports car. I said to them what sort of money are you looking at for that? And I said to them so, basically, if you both lost your jobs and the chips were down, what would you live on and how would you do it? They said well, basically, we've just got our savings and that's our rainy day. But we want our savings working for us. So we just agreed to take half. Well, I said let's just do half of your savings and keep the other half in your bank account so that you can sleep well at night, safe in the knowledge that if anything happens, initially you've got the money there and obviously by the end of our term, together and everything, you'll have the rest of it. So you can keep living, you can keep the lights turned on and you don't have to worry about it, not quite happy, obviously, to go and get other jobs and things. So it gives them that respite. It gives them that security as well.

Speaker 1:

Now, in the end we actually went for 50k. We borrowed 50k. They kept 25 or 26k in their account and they said that was a great idea. They said they didn't even think of that. But it gives them that peace of mind. It means that they've got money in the background so that if whatever happens, worst case scenario is they've still got that little nest egg there. Because you'll find some investors will get what we call buyer's remorse when you're doing a deal. They'll back out at the last moment because it's a mentality thing that you feel safe when you have a bank or a savings account full of money. Even though banks can go out of business, you can still lose it there. But fundamentally there is this little thing and I know because I've had it myself as well and we've probably all had it at different times when you've got a bit of money, you feel quite secure, you feel quite safe and that's a great feeling to have. That's where we should all aim to get to.

Speaker 1:

I'm not saying money gives you happiness or anything like that, but it can take away a lot of worries, a lot of sleepless nights, so to speak, where you're thinking how am I going to pay this next bill? How am I going to do this? How am I going to do that? So really understand the investor and if they are the type of person that likes to have a little bit of money in their back pocket for that rainy day that may never happen, but that's the way that they operate you've got to make sure that you keep that rainy day fund there at a size that means that they're happy, that they can sleep well at night. So really get to understand if they say to you I've got 100k, I want to know what to do with.

Speaker 1:

I always say and if anything happens, worst case scenario, what will you fall back on? Well, I fall back on my, my savings. Make sure you save some of that pot for them. Okay, don't take everything. And that will cut out investors dropping out at the last minute because I'm about to hand my 100K over to Mark. That means, if anything happens, I haven't got anything. I know I can get my money back at some point, but what happens if I lost a lot as well? Oh, my God, fear. And that's it. They'll pull out. They won't give you a reason, you won't be able to get hold of them, and all of those sorts of things happen. So cut that out.

Speaker 1:

Get an understanding of where they're at, what they're happy to lend, what they feel comfortable lending, okay, and you don't have to take the full lot. We try not to. I always try and leave some money in their bank accounts so that they feel happy with that. And the last thing is, if you get through all of this, you've had this great conversation and you might be thinking to yourself now, bloody hell, this is quite a lot of work. Nobody told me it was going to be this hard to get investors. Well, trust me, it's not. It's just a conversation. This is a friendly conversation. Chat to people just to try and see if they are the right person to work with you and whatever strategy that you're trying to do, but make sure that you always leave the conversation if you think it's gone well. You think they might be interested in working with you.

Speaker 1:

With. How soon would you like to get started on something like this and get a broad idea, a broad date? Some people will say, well, as soon as possible, really broad date. Some people will say, well, as soon as possible, really great stuff. Some people might say, well, the funds are there but they're locked in at the moment. I can't touch them for another month or two or three or something like that. So really get an understanding of when they would like to start with this.

Speaker 1:

Because if you haven't actually got a deal or anything that you're working on right now, you're between deals or you're just trying to find your first deals and things then it's great to have that sort of timeline to think well, they are going to invest, they're comfortable, they've got a percentage that they want, they know exactly what they're going to be making, they've got a timeline on it. They know how much they're going to keep in their own savings accounts and everything, and now we've got a bit of a deadline as to when they want to get started. This is somebody, then, that all you have to do if you don't get started right here right now, is to just keep taking them out for a coffee. Keep building up the know, like and trust with them. Keep sharing some potential deals that you're looking at. We're looking at these opportunities at the moment. Is this something that you know you want to get involved in with us? This is how we can help you. We're actively doing this. You're showing people that you're actively out there.

Speaker 1:

And I tell you what if you do these things and you have these conversations in a very, very nice, subtle and friendly manner, you will find investors. I can absolutely guarantee it. As long as you do it in this manner, you keep it friendly, you keep it light and remember, not everybody will want to work with you. Not everybody will be a serious investor. A lot of time wasters out. A lot of people seem to have it in their head I have got some money. I've got no intention of ever lending it to anybody else, but I will go in to networking events and everything and I will tell people that I'm an investor and I do this and I do that. They'll spend a lot of time. They'll drain you. They're like vampires. They'll drain you Like a vampire drains your blood. They'll drain your energy and your reserve.

Speaker 1:

And then you start to think, oh, there's no investors out there, there's no serious people out there. There are a lot of serious people out there. You're just not having these conversations and, as I always say, if you haven't got enough money, you haven't. You haven't met enough people. The more hands you shake, the more money you make. So you've got to make sure that you're getting out there, that you're talking to people and you're having these conversations, and then you are staying in touch with them, because unless they're a family friend, somebody close to you or a member of your family, chances are they'll be having conversations very similar to this with other property investors. So do be careful on that front as well. I'm not saying they can't talk to anybody else, but they probably are if they are serious about investing. So it's up to you to make yourself the go-to person for that. So I hope this episode has helped you. I hope it also helps and shows you to understand that there is an abundance of money out there. It's just realistically getting yourself out there to make sure that you take advantage of it.

Speaker 1:

The only limiting beliefs that hold you back are the ones inside your own head. So make sure that your own limiting beliefs on money, on investors, on people wanting to work with you, doesn't stop you. We all have that little voice in our head. That is the little voice that is telling you right here, right now, I don't have a little voice. That little voice, yes, we all have it, each and every one of us. That little voice we want to make sure is our biggest cheerleader okay, not our biggest enemy, and it's easier said than done.

Speaker 1:

Now, a book that can help you with that little voice inside your head is called the Untethered Soul. I've just thought of it now. I can't think of who the author is, but the Untethered Soul is an amazing book and it's also very good on Audible. I read the book, couldn't put it down. It really, really helped me to understand the way that I think and how the brain works in a very easy to understand manner, and when I read the book I loved it so much. I bought the Audible version as well so I could listen to it again and again, and again, and it is a great, great book to help you with any limited beliefs and anything you're struggling with.

Speaker 1:

Listen, if you are struggling with anything, then do reach out to me on social media. Do friend me, follow me, drop me a DM, drop me a message. I'm always open to chat to everybody and, of course, check out thepropertyunleashedcom. We have free tools and resources section, which is trainings. We have masterclasses and we have some brilliant accelerator trainings that are going to start turning up on that page as well. These are very low investment trainings that I'm putting out there to help support each and every one of you with all the different property strategies that are out there. So do check those out. Do take advantage of those as well, because these accelerators will get you started in any strategy. You'll understand it completely.

Speaker 1:

Okay, and, of course, if you are suffering and you have no clarity in what you're doing, what strategy you want to be taking right here, right now, then maybe have a little look at one of our workshops, where we get you in the room. We only work with about a maximum of 10 people at a time and we spend the day together. Myself and another coach of mine as well will be there, and we will go through and give you clarity. By the end of the day, you will actually have built your own roadmap for your property investing journey, so you will know exactly what you're supposed to be doing, when you're supposed to be doing it and how you're going to get there. All you then have to do is go out there, follow the roadmap that we've helped you build on the day, which is specific to you, to take the action and get the results that you want.

Speaker 1:

Why? Because a lot of people out there have the knowledge already. They already have the training. They just don't know how to put one foot in front of the other and make it happen. Well, we're going to get out there now and we're going to help people just like you who already have an understanding, who already have the training, that don't need to buy the training courses to start out. If you haven't, then go and get the training first, but once you've got the training, let us show you, let us help you get out there and actually maximize your efforts in what you're trying to do. So anything like that. We are here to help, so I look forward to you joining me in the next episode very soon. If you've enjoyed this episode, please feel free to share it on any platforms and, of course, make sure that you're getting out there. You're taking action and you're getting the results that you want in your life. Only you can do it, and I look forward to seeing you succeed. You take care and bye for now.