Best Ways To Secure Equity Capital For Your Real Estate Project

The most important requisite for a new Real Estate Project is the capital. Entrepreneurs are

always in need of resources to raise capital, which will in turn help them in marketing their new

projects. ‘Real estate rich and cash poor” is the condition often faced by developers. They face

the pressure from the moment the next big project is identified. Owing to this lack of capital

some great business ideas are never commercialized. There are different sources of funding and

one such is Equity Capital. It is the share of capital of a particular company owned by other

shareholders. In order to generate Equity Capital, the developer needs some expertise and

planning.

Equity Financing

It is method of generating capital in which a piece of ownership is exchanged for money. The

advantage of Equity Financing is that developer can focus on making his project profitable rather

than worrying about paying back the investor. The developer gets a fixed amount of time to pay

back the loaned amount of money. This could be the most beneficial funding structure because it

gives you maximum profit and control. Before you make the big leap a lucrative investment

proposition is must.

Investment Proposition

A financial feasible project alone can get you the investors. A proper documentation

showcasing reasonable gains for the investors will surely help you in securing the deal. The

proposal should be clear, professional and crisp. Providing a financial summary describing the

uses of the funds, details of the projects and cash flow is very essential. Attach the project plan

and a detailed discussion about the funding plan should be conducted.

Negotiations and Agreement

The amount of capital you need to ask depends on several factors like nature of the project,

profitability, location, risk factors, etc. Apart from the capital the other items that should be

negotiated include percentage of control in the project, role of the investors, reporting

procedures, etc. Documenting your present and future investment in the project will help in

closing the deal successfully.

Finding an investor for your upcoming projects is a tough task but if you have a financially

feasible project with a well-planned strategy, then you are only few steps away from finding the

right Equity Investor. This effort can be meaningful and there are all the chances that it will last

beyond a single project. Keeping in mind the above mentioned points and a little research work

could easily lead you to your angel investor.

By : www.realestateindia.com