Equity Partnerships Wealth Creation as a Team Sport

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Mabel Ferguson
5 years ago
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1 Equity Partnerships Wealth Creation as a Team Sport

2 DISCLAIMER: Doing equity partnerships is NOTfor everyone It involves high degrees of stress, accountability, and professionalism that are not necessary when you go it alone You need to LIKE making money for OTHER PEOPLE, not just yourself You need to understand what Investors WANT and what they DON T WANT!

3 Is this for you? Pros: You can expand your portfolio far quicker than you could on your own You will gain skills in sales, management, reporting and deal making that can make you very rich in the long term You will eventually make your way into the circles of the very rich, and this can lead in very interesting directions later on

4 Is this for you? Cons: Partnerships can become nightmares if they go wrong Expect to be raked over the coals early on you will need to cut very favorable terms to the investors for the first deals, and they will be extremely demanding when it comes to knowing how you are doing your job You need to commit to being joined at the hip with your partners for an extended period of time

5 So What Do TheyWant? To Make Money and as Quicklyas Possible! A Large Equity Share and Cash Flow Someone Reliable Who Can Make Projects Work A Solid Business Plan Working with Someone with a Track Record on Big Deals

6 To Work with Someone Who

7 What Don tinvestors Want?

8 Two Requirements

9 Is largely a function of YOUR experience. THEREFORE

10 Your first objective should be to get some experience and establish a track record!

11 That Means

12 Every Investor

16 You need to adopt a mindset of being a custodian of wealth.

17 Before Getting Started

18 If YOUHad $10 Million in a Bank Account, For Instance

20 A quick note on math: If you don t learn the basics, nobody will trust you with their money. Sorry.

21 ROI = Gain from Investment Cost of Investment Cost of Investment

23 You Have to Know the Details

24 They Want the Hard Numbers but EMOTIONS!

25 That Means

26 So What Am I Getting Again?

27 It doesn t need to be hard!

28 (But notso much enthusiasm that you come off as a rookie, or a crackhead. You want to appear like you believe strongly in the deal, but don t oversell it.)

29 Okay, Dunlop! I wanna make other people rich too, but how do I get started with no track record?

30 (Because alliteration is awesome.)

31 THIS IS NOT A GET RICH QUICK SCHEME, THIS IS A RESPONSIBLE PATHWAY TO GETTING GOOD AT THIS. It will take patience, but it will avoid a lot of pitfalls, and will earn you a reputation as a responsible operator, which is the greatest asset you can have. This needs to be treated like a career: You start in the mail room getting crapped on by everyone, and work your way up.

32 STEP 1 Find an investor, ideally a smaller non professional investor with whom to partner Someone you already know and can work with is ideal, but there are many resources for finding new investors (I ll include a list of resources at the end of this presentation). Be OPEN with them, explain you don t have prior experience, but you want to BUILD A LONG TERM RELATIONSHIP WITH THEM, that you want to START SMALL AND SLOW, and that YOU WILL TREAT THEIR MONEY LIKE IT IS SACRED.

33 STEP 2 Find a SMALL deal. I would recommend something like a duplex, triplex or quadplex. Small dollar value - $50k-$100k max Some value-add a rehab job NO LEVERAGE make it an all-cash deal

34 STEP 3 Create a proposal for the investor and pitch the deal. TREAT IT AS IF IT WERE A $10m DEAL. Focus on the ROI to the investor the $$$ will be low but the ROI% should still be impressive. Include details of how you will execute the plan and manage the asset you will be doing ALL the work. GIVE THE INVESTOR A BIG CUT I d even give them 75% on the first deal if they re providing all the cash

35 STEP 4 After closing, execute on your plan rehab, lease it up, flip it, whatever your initial plan was. AGAIN, TREAT IT AS IF IT WERE A $10m DEAL. Give your investor monthly reports If using Rentmanager, give them read-only access so they can see the numbers remotely and in real time Every step of the way, focus on keeping the investor happy and making them money.

36 An important note: YOU ARE BUILDING SKILL AND CREDIBILITY!

37 STEP 5 Once you have a successful deal done, the magic begins. Your investor will want to reinvest with you Your investor will bring his/her friends to the party You can now market yourself as a seasoned investor You will have the skill to run a $10m deal BECAUSE YOU TREATED THE SMALL DEAL AS IF IT WAS ONE.

38 I only recommend doing this if you want to go BIG.

39 How big???

40 BUT Financial freedom Time with your family To travel the world An easy income for retirement Then there are easier ways.

41 VS

42 Finis. Q&A or hit me up with questions later on. I don t bite!

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