How to negotiate terms with an investor when seeking to finance your investments deals.

Boris Mokabo
Jul 28, 2017 · 3 min read

This question is from Linda and she asks : How do you negotiate terms with an investor when seeking to finance your investments deals?

It’s a very good question. It can be very difficult to negotiate, let alone getting interests from an investor when seeking for finance for your investments projects.

So here are my quick 7 Tips to negotiate better terms and close more deals.


1. Be clear about what’s in it for them.

Think hard and Articulate clearly on what's in it for them. If they don't understand it they won't invest in it. Ever

2. Don’t sell on your opinion, Demonstrate with facts.

The problem is that everybody is trying to sell with what they think is the right GDV, turn it to an HMO, they think they can have a Planning permission because they have made a phone call with the local council.

"If it’s not on paper it doesn’t mean anything".

Demonstrate with facts how and why you adding value to the project.

3. Always build Trust first.

Try to engage with them and build trust by nurturing a relationship with them before you need cash. It's not new that people do business with people they Know - Like - Trust.

4.Go deep!

Understand their goals, visions, and values and make sure your project is in alignment with them. The easiest way to sell your idea to them is to sell what you know they would love to invest in and why.

Eg. There will be no point pitching a rental exit to an investor who is after capital gains!

5. Make sure it makes sense.

Ask yourself: Would I invest in this deal under the current terms. It has to be a win/win situation with a balance that makes sense for both sides.

6. Know their history.

Find out what they already have invested in. Use this as a benchmark for you to compare and demonstrate how you'll help them make more money.

7. Don’t think of the money first, think of future deals.

If this is your first deal your goal might be to get experience, learn more and gain credibility for your next project and this value alone might be worth more than a temporary smaller return.

Bonus : Show that you CARE. Nobody wants to feel a cash cow. Treat your investor like a human being and not like a walking wallet.

In Short:

“If you truly understand what they want, build trust and demonstrate your value you’ll be in a far better position to negotiate terms that will be mutually beneficial for you and your investor and get the deal done.”

This is my 7 tips on how to negotiate financing terms with an investor for your investment project and get more deals done.

Hope you enjoyed it and if you want more post like this from me please like, comment and share!

Boris Mokabo

Written by

RE Investor at MKB Equity Investments & Founder at HNWConsulting.co He specialises in generating HNW & Mortgage clients for the finance & lending industry

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