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How to think out of the box regarding Equity

Written by: Carl Moore

Article Overview: Equity is expensive and investors want to buy assets for 10 to 30 cents on the dollar. There are a number of different sources for equity that can be accessed.

How to think out of the box regarding Equity

Equity is expensive and investors want to buy assets for 10 to 30 cents on the dollar. There are a number of different sources for equity that can be accessed.
1. Land Owners. This has been a traditional source of equity for land acquisition and development. The land owner put the land into the deal as equity and the builder puts in the expertise for the land planning, entitlement, and development. Right now finished lots in many markets aren’t worth the cost of development so very few of these deals will be done in the near future but as the market strengthen this is a very good equity source to help your growth.
2. Land developer. There are a lot of land developers that have been left with finished lots being abandoned by builders. The land developers need to deliver lots to satisfy their investors and lenders. They need a builder to build homes so they can dispose of lots. The developer will subordinate the land to a construction loan, joint venture with the builder, or hire the builder for a fee to build the houses. We have a number of our builders involved in these types of deals right now.
3. Financial Institutions. There are work out opportunities to help banks liquidate real estate owned (REO) properties they have due to bankruptcies, and foreclosures. These projects will have finished lots, and undeveloped property. Banks will sell these assets at very favorable prices, terms, and conditions or hire you for a fee to manage the asset through completion.
4. Wealthy Individuals. Many Wealthy Individuals will fund land acquisition, pre-leased office or retail, etc.
5. Larger Companies. Builders that have joint ventured with large companies such as oil companies, railroads, manufacturers, retailers, etc. Generally they have idle land and facilities that they would like to liquidate. The first project can lead to a long term relationship.
6. Investment Funds. There are a number of individual investment funds which typically have a manager and an investment strategy. Generally you are going to locate these funds through networking.
7. Foreign Capital. You are probably going to spend a lot of time and money chasing it.
8. Trade contractors and suppliers. This is a forgotten group of investors that have a vested interest in your success. Generally this is house by house equity capital for a share of the profits.
9. Investment bankers. This is very expensive, normally in the double digit range of internal rate of return.
10. Friends and family. This is a misnomer. It would be great if we had a wealthy father or rich uncle but that is not the case for most of us. This is a category of investment offering that is referred to as a Regulation D Offering. Generally it is limited to a maximum of 35 investors. Regulation D Offering is a great source of equity funding but you can’t be sloppy. You need to have a lawyer involved in creating the agreement, the plan, the disclaimers and what is frequently referred to as the “big Boy” letter stating they can afford to loose the investment. Generally “friends and family” money is below $10 million which is below the threshold for most investment bankers. The funds are generally raised through networking with your doctor, dentist, lawyer, accountant, country club members and wealthy friends.

There are a lot of sources for equity capital. You need to be working now to develop the relationships. People like real estate investments. When the bottom of the market is perceived the flood gates will be opened. You want to make sure you have done your homework so you are there to take advantage of the opportunities.

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Article Tags: assets, investors



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Re: Quick Ways To Utilize SEO Effectively - 1. If you dont want too much competition from other SEO's, choose your keywords precisely.For example, Instead of keyword Loan choose keywords like Bank Loan, Equity Loan, Student Loan, Home Loan etc. Order of keyword also matter for search engines. Search engine treats ?Loan Equity? and ?Equity Loan? as different keywords. 2. Best seo practice is to get at least one of your primary keywords in domain or sub domain name of your website. You can use hyphens (-) to separate multiple keywords. For example: seo-service, seo-guidelines, free-seo each cover two keywords. 3. Get your second or third keywords in your directory name and filename. 4. Keep your webpage free from any syntax error, declare document type at the beginning and validate your HTML and CSS because search engine don?t like pages with too many errors. 5. Give a short Title in of your page in 3-9 words (60-80 characters) maximum in length containing your primary keyword. Remember it will be displayed in search results so choose wisely. 6. Try to include your most important keyword phrases in heading tags on your page if you can but keep in mind it should not be exactly same as title of your page. You can use (H1 H2 H3) tag for specifying anything important. To reduce size of heading use CSS. 7. Specify Meta keywords in heading of document. Limit it to 15 to 20 words. Although not all the search engines give importance but there is no harm doing it. Search engine like Yahoo still give it importance. 8. Write Your Meta Description tag attractive containing keywords because it will appear on the search engine result pages. 9. Use text for navigation menu instead of using images or Java scripts. 10. Try to include your most important keyword in hyper linked text and text and text that immediately precedes or follows the hyperlink. Do not use same keyword always use synonyms at few places. Just like instead of seo, I have use search engine optimization at many places on this page.
Getting something for nothing? - This is a tough one because it's hard to get something for nothing. There are two forms of financing - equity and debt. Equity is when you give up a part of your company / invention / idea in return for money or services. Hopefully the person you are bringing on is someone you can work with because you are now partnered until you sell or close down the company or buy each other out. Debt is when you borrow money so you aren't giving up a piece of your company but you have to pay the money that you are borrowing back. If you have a solid credit history or tangible assets then you can get it from the bank. If you don't have either then you can get private money but the interest rates will be higher (10% or more). Since every month you'll have to make payments you'll have to think about how long it will take you to start bringing money into your business from your invention. Either way you're giving up something in return for the financial help.The only other options I can think of are government grants that you don't have to pay back or befriending people who want to help you because they like you and by doing so they are being rewarded (very hard to find!) Good luck!
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