What are the best ways to attract investors to your development projects?

Speaking of target audience - investors in a real estate project could also be the off takers and sometimes the end users. This case is usually preferred and is the current trend on most residential projects in Nigeria. Cost of funds is minimal. The developer needs to be very convincing on the functionality of the design, quality of work, milestones and future appreciation value of the property.

If you are a Commercial Developer you need to take a look at Opportunity Zone Federal Tax Credits. Congress passed a IRS Tax code law in the 2017 Tax Cuts and Jobs act that allows developers who want to develop ground up contruction in newly acquired CRE or new property with a rehab of at least 50% can that are located in 8764 Low & Middle income areas of the US, can raise capital from accredited investors with current capital gains to invest. If the develop launches a Private Equity Qualified Opportunity Zone Fund and if these US accredited investors invest their capital gains and hold it in the fund for 10 years or longer, the investor get to pay ZERO (Normally 23.8% at Exit) Federal Capital gains at exit giving them Tax-Free-Growth.

Sell the project idea to them (Investors) as if you were in their shoes! All investors wants to know what they stand to gain from buying into your project, so you have to be able to make them clear about all there is to be gained in buying into the project. In terms of returns on investment, Liquidity advantage, Real value appreciation overtime.

Feedbacks are very important. It is you seeing your process or service delivery from the lens of an end-user or someone in the chain of process delivery. You may want to first appraise and highlight the exact work done with people in your network and tailor feed back questions towards that. It helps to be specific and catch their perspectives on those specifics. It also shows you what you do better to keep leveraging that or what to improve on.

Absolutely. For new entrants, projects to showcase as track record can be the ones you have worked on while on a job as an employee or project manager. If there is no previous work and you are simply courageous enough to step out to solve a property need gap that you have identified, you should consider interning first with a reputable existing developer and be actively involved. The developer that you chose to do this with says something about your values so you want to carefully chose a developer or project that requires a high level display of expertise, trust, credibility & other values.

Investors are keen on profits. They are well within rights to be. However, I'd say that developers should not over promise returns especially in the situations where non-financial incentives is not of interest. You may also want to add some non-financial investors depending on your clime or nature of project. You also want to ensure that your agreements with investors are well thought through, discussed, understood, documented and duly executed to forestall future litigation which ends up eating into the cost of project and ultimately returns.

The follow up part is very important. Do not let your investors feel neglected after you have attracted them. This means that you need to be deliberate about the system that attracts, personalize their interests and allows for follow up based on their interests/involvement from the start. Investors like to feel important. Cost-wise, it is better for you when they are also the off takers. Therefore you need to be strong on following up with project updates.