Raising Over ￡1m in Private Finance: Lessons from the Trenches

Welcome to another edition of The Business Owners' Property News - my newsletter dedicated to helping business owners and busy professionals get started in property investing.

I recently did a poll on the sort of topics you wanted more articles on - raising private finance was a clear winner.

Raising private finance for property investing can sound like a glamorous shortcut to success. But let me tell you: it’s far from easy.

Over the last four years, I’ve raised over ￡1 million in private finance, and while it’s been rewarding, the journey was not quick and easy!

If you’re thinking about this route, here are some lessons I’ve learned.

Trust and Credibility Are Everything

Private finance is built on trust. People don’t just hand over their hard earned money without solid reasons to believe in you.

For me, trust was cultivated over 30 years as an accountant and business owner. My reputation, built within a network of professionals, helped establish the credibility needed to even start the conversations around raising finance.

Why would people want to invest with you?

Investors often look for opportunities to grow their money without taking on the day-to-day stress of managing investments themselves. By demonstrating your expertise, track record, and ability to deliver consistent returns, you position yourself as a safe pair of hands for their capital.

In my case, my investors are mainly business owners in my business network that have company cash that they want to deploy - and learn about property investing.

Find your audience - they may be in your profession, eg doctors, dentists or teachers. The may be in your industry or trade association or in your networking group.

The key is to start building meaningful relationships with your peers.

Leverage your existing network

Start by identifying individuals who already know and respect your work ethic and integrity. Attend networking events, stay active on professional platforms like LinkedIn and share your property journey consistently. When you’re transparent about your successes and challenges, you naturally build rapport and trust.

Testimonials

Getting vouched for can be incredibly powerful. If you’ve successfully worked with clients, partners or previous investors, ask them for written or video testimonials. These serve as social proof, reassuring potential investors that others have had positive experiences working with you.

Prove Your Strategy with Your Own Funds

Skin in the Game

One of the biggest mistakes I see is people seeking private finance without having put their own skin in the game. Before asking someone else to trust your property strategy, prove it works by risking your own capital.

When I started, I used my own funds to demonstrate that my property strategies weren’t just theoretical—they delivered real returns. This made it far easier to convince others to invest.

Other People's Money

Property courses often make raising finance sound easy by emphasising the concept of OPM—Other People’s Money.

I HATE THE TERM - I FIND IT DISMISSIVE AND DISRESPECTFUL.

While it’s true that leveraging private finance can accelerate your journey, these courses can oversimplify the process and gloss over the hard work involved in building trust, handling objections, and delivering results. Using private funders' money responsibly requires a proven strategy, clear communication and a track record that shows you can manage risks and deliver returns.

Otherwise, you risk alienating your network and damaging your credibility.

People want to see that you’re willing to take risks with your own money before they entrust you with theirs.

Patience Is Non-Negotiable

Rejections and objections will come—sometimes more than you’d like to admit. The key is to remain patient and professional.

Getting frustrated or taking rejection personally won’t help. Each “no” brings you closer to a “yes” if you’re willing to learn from the feedback.

Some common objections include:

• Risk concerns: “What if the market crashes?” or “What if the project fails?”
• Liquidity fears: “What happens if I need my money back quickly?”
• Contingency planning: “What happens if things go wrong?”

To overcome these, be prepared to educate your potential investors. Explain your risk mitigation strategies, such as diversifying projects or securing properties below market value. Address liquidity concerns by clarifying your exit strategies and timelines.

Share your contingency plans: for example, in 2020, I experienced delays during the pandemic when refinancing projects took longer than expected. I kept my investors informed, ensured they understood the steps I was taking to resolve the situation, and reinforced their confidence in my ability to manage challenges.

Importantly, I’ve never defaulted on a loan, and maintaining open communication has been key to navigating difficult periods.

Have a Solid Plan

Before you approach potential investors, make sure your plan is airtight. This includes detailed property projections, exit strategies and contingency plans. Investors need to see that you’ve thought through every scenario and that their money is in safe hands.

Your plan should also highlight why property investing is a sound choice, especially in the current economic climate. Use data to back up your claims and show how your strategy aligns with market trends.

Include your contingency measures, such as holding reserve funds or having alternative exit strategies, to reassure investors that you’re prepared for the unexpected.

One of my contingency plans is to hold some cash reserves and include cash flowing strategies such as project management, consultancy and flips in my repertoire to generate cash.

A well-prepared plan not only inspires confidence but also shows that you respect your investors’ time and money.

Offer Security and Assurance

One thing that reassures investors is knowing their money is protected. Whether it’s a first charge, second charge or a personal guarantee, offering tangible security can make your proposition far more attractive. The more you can mitigate perceived risks, the more confident your investors will feel.

Business owners, in particular, make excellent candidates for private funding. They understand the importance of calculated risks and are often looking for ways to diversify their income streams. They’re also likely to appreciate the value of security and clear communication.

By tailoring your pitch to their mindset and showing how property investing complements their financial goals, you’ll increase your chances of success.

Final Thoughts

Raising private finance is not an easy option, but it’s a powerful tool when approached correctly. It requires a foundation of trust, a proven strategy and unwavering patience. You must be ready to tackle objections, provide detailed plans, and offer security that makes investors feel confident. Success in this arena isn’t about luck—it’s about consistent effort, effective communication, and the ability to adapt when challenges arise.

Remember, private finance is a relationship-driven process. It’s about building partnerships that benefit both sides. By demonstrating your professionalism, delivering results and maintaining transparency, you can foster long-term relationships with your investors, creating a win-win scenario.

This approach not only helps you grow your portfolio but also establishes a reputation as someone investors can trust, ensuring continued success in your property journey.

Well there we have it - another edition of The Business Owners' Property News - this one all about raising private finance for your property ventures.

Do you want to create a solid plan to raise finance? Get in touch to find out more - at Brahma Property we have many consultancy packages custom made to help achieve your goals.

Call me on 0121 647 7090 or email [email protected]