What information would an investor need to know before investing money with a builder in a housing project?

Answer 1

Almost any investor will want to see a business plan that will lay out in some amount of detail what you are planning to do in the business, how you plan to make money, when you expect to start making money, and what the potential problems might be. They basically want to see that you have put some thought into the venture and that they are comfortable with your assumptions.

Answer 2

I would first want to know who is running the housing project. Is it a goverment project, is it an investor, etc? How would your money be used? Are you buying a bond in the project, investing directly. Is your money guranteed by the project. What are you risks? Can you lose it all or only the amount of interest? Are you promise an interest rate or a piece of the pie( a percentage of earnings after the project is complete. Probably the most important, if this a private investor what is their track record? Have they done this before, once, many times or They talk a good game and have no experience.

Answer 3

Obviously you would want to know your expected return on investment. But it seems to me the phrase "time is money" is no more true than in the construction industry. If a project falls behind schedule you can kiss your ROA good bye. Here's a list of things I would want to know if it were me investing:

What is the schedule? Expected start date - Expected completion date and every phase in between.

Are there penalties for the builder if he/she falls behind schedule? Likewise, are there incentives for finishing early? Remember, time is literally money. The cost of gypsum board (drywall) doubled this year, along with numerous other common building materials.

Is the builder licensed, bonded and insured within the state they opperate? If not, watch out!

Is the builder capable of undertaking the project? Look at their past projects and ask around. What kind of working reputation do they have?

Who is the architect, engineers, building inspection office, and associates of the builder? Who's the foreman? Does he seem competent? It's important to know the team your funding to complete your project.

Just my thoughts.

Answer 4

You want a lot of information:

1) To see that he/she is not in debt.
2) That they have a good track record in home building, and not just with the banks and lending instutions, but with former clients they built homes for. Builders reputations rest on the final product. Unhappy homeowners tell potential home buyers.
3) Know the housing market in the area where you are building and in the country. For example; right now, rates are up, people are cooling off from the buying frenzy of recent years. Who is going to buy these houses?
4)CAUTION, CAUTION, CAUTION.

Answer 5

***Bad time to get into real estate. The market is overheated, and there are about to be alot of builders going bankrupt. Don't look at the last 5 years sales, the market has been super hot and it is falling fast now. Put your $$$ in a mutual fund or something, but real estate is for suckers right now.

Answer 6

proven history. You should be able to show you have the means and the ability to make money