Tuesday, 22 July 2014

How to Find the Right Equity Partner for Your Real Estate Investment

Commercial real estate investing is like wanting to date someone who is way out of your league. She’s smart, beautiful, and funny; she has everything you’re looking for, but you just don’t quite have what it takes to get her. You need help. Maybe you get a makeover, or your friend coaches you on how to talk to her. That friend brings you up to the level you need to be at so you can get what you want. In commercial real estate, that wingman is your equity partner.
Working with a good equity partner is probably the most important decision you can make for your real estate project. This person or group is your business partner. Not only is his capital critical to the success of the property, but a good equity partner may provide additional capital to help your property “weather the storm” if things don’t go as well as expected. 
On the other hand, the wrong equity partner can cause significant problems for you and your property. At best, you have an uncomfortable and unsatisfying work situation. At worst, your relationship with your equity partner could devolve into a legal dispute. Several years ago, our company encountered a situation in which one of our main equity partners had little understanding of the normal processes of property investment in development. This lack of understanding led him to believe that we were not working in the best interest of the property, and he became belligerent and unrealistic in his expectations. Ultimately, a lawsuit ensued, which caused a large drain on our time and resources. 
Finding the right equity partner isn’t always easy, but it’s always worth the trouble. Here are a few tips for finding the right equity partner for your real estate investment:
  1. Analyze the property. First, you should analyze your property, taking into account its size, location, price, and type (office, shopping center, hotel, land, etc.). Furthermore, consider whether it’s an existing property or a ground-up development project. 
  1. Determine who will be interested. Next, you need to figure out what kind of equity partners will be interested in the property. The happiest equity partner is one whose needs are met by the investment. For example, if the investment is a large, fully occupied shopping center, that would be suitable for an institutional investor. However, smaller properties that will seem like “small fish” to institutional investors might be very interesting to individual investors.
  1. Contact potential equity partners. Once you’ve determined what kind of equity partner will be interested, you’ll need to contact them and present the opportunity. To find institutional investors, it’s a good idea to work with a mortgage banking firm. To find individual investors, your best bet is to work with real estate investment firms and mortgage bankers. On the other hand, if you already know a lot of wealthy investors, you may be able to approach these friends or family contacts about providing the equity.
  1. Select an equity partner. When you have a few potential investors, it’s time to pick one. However, there are several skills, qualifications, and other attributes you should look for in an equity partner. 
What to Look for in an Equity Partner
When finding an equity partner, you don’t have to jump at the first person to offer you money. In fact, it’s best to choose a partner with certain attributes. A good equity partner has:
  • Real Estate Investment Experience. Someone with real estate investment experience can understand the ups and downs of real estate markets. His experience may prevent him from overreacting or making irrational decisions when things don’t go exactly as planned. In addition, if your equity partner is experienced, he should understand what’s needed of him and respond in a timely fashion.
  • Sufficient Liquidity. Your equity partner should be well-diversified and have a large amount of liquidity compared to the equity investment made in your property. You are much more likely to have issues with your equity partner if the property investment sucks up a substantial portion of his liquidity. If your partner doesn’t have sufficient liquidity, his personal financial issues can put undue pressure on your property to perform faster or better than is realistic. Furthermore, if your property needs additional capital at a critical moment, your partner may not have the resources to provide it.
  • Intelligence and Rationality. During the course of your real estate investment, there will be several times when you need your equity partner to approve one of your business decisions. You want a smart and rational decision maker who will consider issues carefully and make the right decision each time so your property can become successful.
Once you’ve found your equity partner, you’ll have to determine profit splitting. Most mortgage bankers and real estate investment firms will be able to clearly explain to you the current “market” for partnership profit splitting. You should speak with multiple firms, asking each one for their take on the market. Equity partners will want to make a good return on their investment, usually 15 to 25 percent annually, depending on the type of property. In addition, they will want much of their capital and return back before you earn a sponsor’s profit. 
One option for profit splitting is the IRR waterfall technique, Under this option, the debt provider (i.e., the bank) has first priority for repayment and carries the lowest risk, followed by the equity investor, and, lastly, the developer. Under this arrangement, the risk for the equity investor is minimized, while the developer is positively compensated if the project does quite well. If returns are higher than expected, the developer gets a larger share, but if returns are lower, the equity investor gets more of the returns. 
Another option gives a specific preferred return percentage to the equity investor and ensures that cash distributions in excess of the preferred return are split between you, the developer, and your equity partner. This split “excess” cash flow is usually highly negotiated on each property. There are other options to be considered by you and your equity partner, and you’ll need to come to an agreement — together.
Finding the right equity partner is more than a simple matter of one successful real estate investment — just like a first date earned through a friend’s help doesn’t necessarily lead to another. If the first investment goes well, the success may convince your equity partner to invest in multiple projects in the future. At that point, you’ve created a real estate investment “marriage” by creating an efficient, effective, lasting partnership that is far more valuable than a one-time deal.

Saturday, 14 June 2014

10 Steps To Becoming A Millionaire By 30

Getting rich and becoming a millionaire is a taboo topic. Saying it can be done by the age of 30 seems like a fantasy. It shouldn’t be taboo and it is possible. http://www.princelinkconsultants.com/index.php/crowd-funding

At the age of 21, I got out of college, broke and in debt, and by the time I was 30, I was a millionaire. Here are the ten steps that guarantee you will become a millionaire by 30. Princelink Consultants

1. Follow your money. 

In today’s economic environment, you cannot save your way to millionaire status. The first step is to focus on increasing your income in increments and repeating that.
My income was $3,000 a month and nine years later it was $20,000 a month. Start following the money and it will force you to control revenue and see opportunities.

2. Don’t Show Off – Show Up.

 I didn’t buy my first luxury watch or car until my businesses and investments were producing multiple secure flows of income.
I was still driving a Toyota Camry when I had become a millionaire. Be known for your work ethic, not the trinkets you buy.

3. Save to Invest, Don’t Save To Save.

The only reason to save money is to invest it.  Put your saved money into secured, sacred (untouchable) accounts. Never use these accounts for anything – not even an emergency.
This will force you to continue to follow step one (increase income). Still to this day, at least twice a year I am broke because I always invest my surpluses into ventures I cannot access.

4. Avoid Debt That Doesn’t Pay You. 

Make it a rule that you never use debt that won’t make you money.  I borrowed money for a car only because I knew I could increase my income.
Rich people use debt to leverage investments and grow cash flows. Poor people use debt to buy things that make rich people richer.

5. Treat Money Like a Jealous Lover.   

Millions wish for Financial freedom  and only those who make it a priority have millions. To get rich and stay rich, you will have to make it a priority.
Money is like a jealous lover. Ignore it and it will ignore you, or worse, it will leave you for someone who makes it a priority.

6. Money Doesn’t Sleep.

Money doesn’t know about clocks, schedules or holidays and you shouldn’t, either. Money loves people that have great work ethic.
When I was 26 years old, I was in retail and the store I worked in closed at 7 pm; most times you could find me there at 11 pm, making an extra sale. Never try to be the smartest or luckiest person; just make sure you outwork everyone.

7. Poor Makes No Sense.

I have been poor and it sucks. I have had just enough and that sucks almost as bad. Eliminate any and all ideas that being poor is somehow okay.
Bill Gates said to a group of college grads, “It’s not your fault if you were born poor; it is your fault if you stay poor.”

8. Get a Millionaire Mentor.

Most of us are brought up middle class or poor and then hold ourselves to the limits and ideas of that group. I have been studying millionaires in order to duplicate what they did.
Get your own personal millionaire mentor and study him or her. Most rich people are extremely generous with their knowledge and their resources.

9. Get Your Money to Do the Heavy Lifting.

Investing is the Holy Grail in becoming a millionaire and you should make more money off your investments than your work.  
If you don’t have surplus money you won’t make investments. The second company I started required a $50,000 investment. That company has paid me back that $50,000 every month for the last ten years.
My third investment was in real estate where I started with $350,000, a large part of my net worth at the time. I still own that property today and it continues to provide me with income.
Investing is the only reason to do the other steps, and your money must work for you and do your heavy lifting.

10. Shoot for $10 million, not $1 million.

The single biggest financial mistake I’ve made was not thinking big enough. I encourage you to go for more than a million.
There is no shortage of money on this planet, only a shortage of people thinking big enough.
Apply these 10 steps and they will make you rich. Steer clear of people who suggest your financial dreams are born of greed.
Avoid get-rich-quick schemes, be ethical, never give up and once you make it, be willing to help others get there, too.
Let me know when you get there.
Be great. Nothing else pays. Princelink consultants

Friday, 30 May 2014

The best time to invest in Real estate business in Kenya

It is a beehive of activity as heavy earth movers and a group of builders assemble brick and
mortar for a lavish property development taking shape on an expansive piece of land situated on the eight-lane Thika superhighway. When completed, 32-acre Garden City, financed by a UK-based private equity firm, will comprise a 50,000-square meter retail mall (expected to be the largest in East Africa), modern commercial premises, 500 homes and a four-acre central park that will house an outdoor house arena for staging shows and concerts. “Kenya’s property market has potential for higher rates of return compared to other jurisdictions. It is also relatively easy for foreign investors to enter Kenya’s real estate sector. While the last four to five years has seen turbulence in developed property markets around the world, Kenya’s situation has remained relatively stable,” says Nathan Luesby, the Managing Director of Jenga Web Limited and a former broker at the London Stock Exchange. While markets such as India, Dubai and China have had a boom over the last 15 to 20 years, these markets have big bubbles with potential to explode anytime. What a foreign investor seeks in Kenya’s property market depends on several factors, including one’s risk profile and what kind of returns they are looking for. Industry figures show a slowdown in property prices, a situation experts say offers the best opportunity to get in. However, the cost of mortgages is still high, making many investors hold back their buying decisions.properties@princelinkconsultants.com

“But there is no bubble in the property market. A rapid population increase and a rapidly growing economy are still fueling demand for property, against limited supply,” says Luesby. Limited supply While there is limited supply of houses, prices have remained flat and stagnated in several places. High mortgage has hit the middle-class, the main drivers of the property market. The market has stagnated because many are unable to buy and are instead renting. In a bubble situation, prices inflate exponentially on the back of no demand. People who borrow to finance purchase of houses panic when the price of the property dips below the cash borrowed to finance its construction. In Kenya, most of the property purchases are cash-based. Property development is one of the most lucrative businesses, with a rate of return of at least 30 per cent. For those targeting rental income, the best option would be to purchase ready-made houses. Investment in rental houses has a return of between six and eight per cent. This compares well with returns in commercial property where returns are at 12 per cent. http://www.princelinkconsultants.com/index.php/properties

Tuesday, 13 May 2014


Speaking at the signing ceremony, Li said the presence of the African leaders and their representatives www.princelinkventures.com demonstrated African countries' common desire to develop railway network in East Africa.

NAIROBI - China and Kenya signed a co-financing deal on Sunday to build a railway linking Nairobi to Mombasa, a critical infrastructure project to boost regional trade and deepen integration in East Africa.
Visiting Chinese Premier Li Keqiang, together with presidents of Kenya, Uganda, Rwanda and South Sudan as well as representatives from Tanzania, Burundi and the African Development Bank, witnessed the signing of the agreement.
A country has to improve transportation infrastructure before its economy takes off, Li said, adding that China is ready to share its technology and experience in railway construction with all parties and cooperate with them in project design, construction, equipment, management, personnel training and financing.
The premier said interconnection in East Africa and in Africa at large will fundamentally boost economic development of African countries.
During his Africa tour, Li had said that China is willing to join hands with Africa to build the continent's networks of high-speed railway, expressway and regional aviation. The Mombasa-Nairobi railway is an important part of those networks, he said.
China will improve communication and coordination with countries concerned and the African Union (AU), and at the same time welcome the participation of a third party so as to realize mutual benefits and win-win results, he said.
The East African leaders said at the ceremony that the Mombasa-Nairobi railway will increase transport capacity of East African countries, accelerate interconnection and regional integration of East Africa and boost East African countries' economic development.
Addressing reporters after the ceremony, Li said the building of the railway is a good start, and China is ready to work with Kenya to turn the railway into a model project.
Noting that China has abundant experience and excess capacity in infrastructure construction, Li assured African countries that the Chinese equipments will meet their demand and have guaranteed quality.
He also said that the Chinese companies participating in the project will be asked to take on local people and provide them with training.
"Chinese companies have to abide by local rules and respect local customs during their operations here, and they have to fulfill their due social responsibilities," Li said, adding that China-Africa cooperation is not merely about projects, but also means people-to-people exchanges.
Since China is the world's largest developing country and Africa is the continent with the largest number of developing countries, they are complementary in their advantages and their development offers opportunities to each other, Li said.
The common development of China and Africa will not only benefit a combined population of two billion, but also change the global development pattern, he added.
Speaking to the press, Kenyan President Uhuru Kenyatta and Ugandan President Yoweri Museveni both agreed that the Mombasa-Nairobi railway has significant and far-reaching impact in boosting interconnection and regional integration in East Africa.
The project shows both China's commitment to African development and the great strength of China-Africa solidarity and cooperation, they said.
Kenya is the last stop of Li's four-nation Africa tour, which has already taken him to Ethiopia, Nigeria and Angola.www.princelinkventures.com

Monday, 14 April 2014

Crowd Funding

Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money. Until recently, financing a business, project or venture involved asking a few people for large sums of money. Crowdfunding switches this idea around, using the internet to talk to thousands – if not millions – of
potential funders. Typically, those seeking funds will set up a profile of their project on a website such as those run by our members http://www.princelinkconsultants.com/index.php/crowd-funding. They can then use social media, alongside traditional networks of friends, family and work acquaintances, to raise money. There are three different types of crowdfunding: donation, debt and equity.

Debt crowdfunding
Investors receive their money back with interest. Also called peer-to-peer (p2p) lending, it allows for the lending of money while bypassing traditional banks. Returns are financial, but investors also have the benefit of having contributed to the success of an idea they believe in. In the case of micro finance, where very small
sums of money are leant to the very poor, most often in developing countries, no interest is paid on the loan and the lender is rewarded by doing social good. Sites include http://www.princelinkconsultants.com/index.php/crowd-funding 

Equity crowdfunding                                                                                                                           People invest in an opportunity in exchange for equity. Money is exchanged for a shares, or a small stake in the business, project or venture. As with other types of shares, apart from community shares, if it is 
successful the value goes up. If not, the value goes down. Sites include

Thursday, 10 April 2014


Equity Financing Guide
  There are various types of equity financing, Here are some of the more common types of financing you might come across, and how each of them work. Each entrepreneur has different needs, and so it is up to you to determine what is right for you.

Seed Capital - This is often referred to as the first round of financing. Seed capital funding usually occurs in the first stages of a new business, perhaps where the project has yet to begin. Angel Investors usually play a key role in this stage, as the higher risk/reward attracts these investors more than Venture Capitalists, where a group decision will usually require an evaluation of activity to date, such as financial data. Generally, seed capital is not a large amount of money, usually slightly higher than basic grants and loans: this type of equity financing falls in the 10-30k range.

Venture Capital - This type of investment usually follows as the next step. It involves significantly more money and virtually always requires the investors to be involved in part of the overall running of the company and its decision making process. The average range for this step is often in the 6 figure range, and is invested as a type of Private Equity. Obviously, the overall aim is that the investors will generate a good return via the growth of the company and ideally the eventual Initial Public Offering (IPO) of the company. Venture Capital Investments are usually made in exchange for a percentage of the company's shares, which will provide a strong return on investment if the company is successful.

Other types of investment funding methods for businesses in their later stages include Hedge Funds and Collective Investments.