Five Steps to Attracting an Investor

Corporate Business Planning with business chart Teamwork Concept.

1. Prepare a Business Plan 

Serious investors will consider doing business with you if they believe you are attentive to all the details of your project. Your business plan should describe the opportunity, its financial projections and your relevant resources/experiences. Include a solid description of the market, explaining its current and future values. Do not assume the investor knows the target market value. 

Every real estate business plan must identify the problem and opportunity. Describe the problem and how you intend to solve it. For example, there may be a shortage of affordable small office suites in a growing market. In your proposal to the investor, it is critical for you to detail multiple exit strategies for the property. Never build a plan with only one outcome. Real estate investing can be unpredictable. 

Finally, you should be clear about profit-sharing with investors. Ask yourself “what’s in it for them?” Provide a clear picture of how each possible exit strategy will be handled. For example, if the strategy is to reposition the commercial space and hold it, outline the financial contribution from all parties for the rehab and then the ongoing profit split. 

2. Provide a Comprehensive Proforma 

A proforma is the document that most investors will want to see first, so make sure it provides a clear picture of the opportunity through the numbers. If you intend to contribute to the deal, this is where the information will be presented. 

3. Create a Business Structure 

Investors will want to see how your business entity is structured. Consult a professional for assistance. 

4. Practice an Elevator Pitch 

An elevator pitch is a brief, concise summary of your opportunity. If you were to run into an investor in an elevator, this well-rehearsed pitch can provide them the necessary information in a minute or less. Investors are busy and see many opportunities, so you need to quickly tell them why your deal is beneficial to them. 

Elevator Pitch Example

On your way to a business meeting, you catch an elevator with the leading investor in your sector. He tells you that if you can convince him to invest in your opportunity, he will give you an offer before the meeting begins. You have 12 floors to gain his investment. What do you say? “My name is John Doe, a partner at Real Estate Knowledge Institute. My company purchases residential properties in developing neighborhoods and restores homes to gain tremendous equity. According to our research, our company is going to grow by over 75 percent in the next fiscal year. As a partner with us, you will be a part of this increasing revenue. Are you interested in investing with us?” 

Some other key phrases include: 

● “Our in-house research team carefully examines properties before purchase.” ● “I know you are concerned about your profit margin. By investing with us, we can give you more equity and cash flow than our competitors. We are eager for you to join our team.” 

● “We are a local business that knows the area well. You can trust that we only buy properties in areas that will be booming in the future.” 

● “We have a positive relationship with our city council, chamber of commerce and other government and community entities that support us in many important ways, especially in areas such as zoning and market values. 

● “Our hardworking staff allow us to have quick turnaround times. Our average time spent at each property is 2.5 years.” 

5. Develop a Credibility Kit 

The key to landing an investor is having a detailed credibility kit. These investors have worked  hard to build their wealth, and you need to successfully convince them to lend you their private  funds. Your potential investor wants to know why they should invest in your opportunity. Your  credibility pack should be comprehensive, illustrating clearly your philosophy, experience and  the potential for investors to earn a high rate of return. 

Each of these documents will allow you to boast in your previous accomplishments and prove  why your opportunity is a safe, profitable investment. Investors want to know about your past  projects, so do not be reserved. Ensure these materials are of professional quality, free from  simple grammar and spelling mistakes. Have a business partner or professional writer check  your work. These critiques will allow you to submit the best work possible.  

As you add documents to your credibility kit, be sure to remember your purpose and audience:  why you are a good investment to a potential investor.  

Keep multiple copies of your credibility kit in your briefcase at all times. You never know when  you will meet a future investor.  

Some featured documents include, but are not limited to: 

Cover Letter 

● Cover letters introduce investors to your company’s mission and value. This personalized statement can be the most resourceful way for the investor to understand your short and long-term goals. Tailor the message to the specific investor you are targeting. The header of your letter should include your name, address, phone number and email. 


● Just like you used a resume to apply to your current job, you need a resume to let investors know your applicable education, employment and real estate experience. Similar to your cover letter, individualize your resume to the specific needs and interests of the investor. Does your investor prefer local clients? Self-employed clients? Long-time real estate agents? Your potential investor might also want to know your credit score, lawyer, title company, and team members’ experience. Apply this information in your resume, which is traditionally only one page long. 

Mission Statement 

● If your organization does not already have a mission statement, create one that reflects the values of your company. Investors love to see that you are thoughtful in all areas of your business. 

Preferred Investments 

● Do you invest in commercial or residential properties? Urban or rural? Local, national or international? These important details allow investors to know your preferred investment opportunities. 

Formal Training 

● Provide a copy or your real estate license, as well as any other additional licenses, certificates, trainings and professional development courses. Have a spreadsheet that documents these activities throughout the year to show investors your dedication to continuous education and real-world experiences. 


● Ask your previous clients to review their experience with your organization. Try to gain a comprehensive scope of your practice, whether it be with homebuyers or business owners. Ask these clients to leave their contact information for the potential investor to ask them further questions. These letters of recommendation will be a powerful influence to future investors. In addition to your clients, you can ask for letters from your bank, law firm and other relevant partners. 


● This section is likely to be the greatest in your credibility kit. Having an extensive list of your past transactions will help you gain credibility in the investor’s eyes. Photographs of transformed properties with precise captions and supporting text are key to building the case of why an investor should conduct business with you. If possible, include your profit margins, timeline and other necessary details. 

Financial Records 

● A key factor in successfully gaining an investor is if you are likely to increase their revenue over time. A detailed record of your finances will allow investors to know how you buy (wholesale, foreclosure, etc.) and make money (realized equity, cash flow, etc.) off your properties. 

Market Values 

● Carefully explain how you choose your markets, as well as the benefits of buying real estate in these areas. Graphs, charts, and maps are especially helpful in building your argument.