There are a number of ways for an aspiring property developer - even one who doesn't have a lot to spend-- to get started. Along with individual savings and investment, two standard sources of financing for a venture are loans and investors. A common structure for a development project is 50-80 % debt and 20-50 % equity investment. For credibility and to ensure that there is motivation for the developer, equity investors usually ask a developer to co-invest. Most invest between 5 and 15 % of the cost; a higher investment means more direction and lower rates.
Getting investors takes some work, but it's possible to find them, even for small projects. Local chambers of commerce can point out investment clubs and companies. Search public databases for building permits that contain the names of developers and contractors who may be interested in local investments.
It's important to understand that getting capital is a time consuming, difficult process. In today's financial environment, things aren't like they used to be. Loans have to be secured by cash flow and assets. It doesn't matter who you know, and no matter how good the project sounds to the developer, it will still be evaluated based on its credit risk.
Getting investors takes some work, but it's possible to find them, even for small projects. Local chambers of commerce can point out investment clubs and companies. Search public databases for building permits that contain the names of developers and contractors who may be interested in local investments.
It's important to understand that getting capital is a time consuming, difficult process. In today's financial environment, things aren't like they used to be. Loans have to be secured by cash flow and assets. It doesn't matter who you know, and no matter how good the project sounds to the developer, it will still be evaluated based on its credit risk.