Here are all steps that you need to set up a short sale:
Though setting up a short sale is considered as a difficult procedure, but you can easily manage it by taking care of the few factors. For an instance, you need to be aware of the requirements, the proper procedure and should find a right buyer who will be interested in buying short sale homes. For your convenience, here we are mentioning the procedure that will let you setup your home’s short sale with much ease.
Step 1: Know the requirements and get prepared
Step 2: Contact your lender and notify him about the short sale
Step 3: Hire a real estate agent
Step 4: Inform your lender about the offer you get
Step 5: Get final approval from your lender
Here you can read these tips in detail about How to Set-up a Short Sale
There were some online services for connecting entrepreneurs and investors near the end of the .com days. The two most notable then were Garage.com (which has now morphed into Garage Technology Ventures) and Off Road Capital.
There are plenty of offline ways to get introduced to angels (Open Angel Forum, various industry events, through lawyers, etc.). The other online tools I am aware of are
- Funding Universe (http://www.fundinguniverse.com) – Broader than AngelList in that it does both seed investor (equity and convertible debt) and lender (bank loan) introductions and covers a broader range of industries, but it is not as prominent in the consumer internet space or with high profile consumer internet investors as AngelList. One big difference is that they don't disclose the names or contact information of their investors until the Investor has indicated that they are interested in a company.
- AngelSoft's investor search (http://angelsoft.net/startup-too…) – This is basically a business plan submission tool with a large database of investors (mostly formal angel groups and VCs, not individual angels).
Definitely when you don't need them. Being able to say no is a powerful negotiating tool. If you don't have that luxury and have anything less then 6 months in cash to burn, you'd better pull a deck together and get it in gear.
Time-of-year wise, Q3 is the worst time to pitch. Vacation plans make it nearly impossible to get all the partners across the line on a decision. (Seems like a lot of deals are closing this summer, however.)
Finally, even if you're not raising you should always be responsive to inquiries that come in and keep in touch w/ firms that you might want to work w/ in the future. Makes it a lot easier to ramp up when the time comes.
There's really no such thing as "reasonable" so much as what is "market" and that changes all the time.
Here's a rule of thumb for you:
- At every round of investment most investors (or a group of angels collectively) want to own between 25-33% of your company or what I usually call the "VC fairway"
- In my opinion, with the exception of extenuating circumstances investors should not ask for more. In VC rounds sometimes you'll see 40% – usually when you choose 2 VCs and they each want 20%. I generally tell people to avoid the 40% scenario but if you do go that route at least make sure you get extra $$$.
- Angel rounds can be slightly different than VC rounds because there's no fixed percentage that the group is typically trying to get to. They'll probably care more about your pre-money valuation than the % ownership. So I'd say giving away 15-20% is very achievable – the reality is it depends on: 1) how hot you are and 2) how much you raise
- If you do "price" a round it will likely be anywhere between $750k – $2.5 million pre-money depending on your experience, demand for the deal, how much progress you've made and (the combo of all of these) how hot you are. Outliers can be higher.
- Increasingly angel deals have been done with "convertible debt" which means that initially the money is a loan (usually not repayable) that is converted to debt when you raise a future round of capital. Investors don't usually like this because they fund the riskiest part of your company and then if you raise at a large price because of their risk / help they have to pay the larger price. Normal convertible debt is priced at a discount to the next round – usually between 15-25%.
- Another mechanism that has become popular is "convertible debt with a cap" which means that it is still debt priced at a future round but it has a maximum valuation that it can't be priced above.
- Advantage to convertible debt with a cap: 1) legal fees less & process is quicker + 2) angels still get a "fair" price without feeling vulnerable to price getting jacked up
I've written about this topic twice if you want more details:
1. Advice: http://www.bothsidesofthetable.c…
2. Pricing: http://www.bothsidesofthetable.c…
Here is a post that covers this question from the perspective of the startup seeking funding, may provide insight into the types of questions you would want to ask a budding startup. http://startupplays.com/blog/20-…
When investing in real estate notes (debt), you can summarize most of the information you'd want into two major questions:
a) what is the quality and current status of the underlying real estate securing the notes?
b) what are the terms of the note and any other debt on the properties?
To answer (a), you need to get into the details of the assets? Where are they? What are they? If it's rental product, what are rents, current occupancy, expenses, etc aka get your hands on historical income statements and current rent rolls. Given the information you can get access to, you should be able to determine how likely it is that the interest on the debt your buying will continue to be paid. I would be extremely hesitant to buy debt on for sale product if you have little real estate experience which it sounds like may be the case.
To answer (b), you need to read the loan documents in detail. Things that will most directly affect your returns on the loan term and interest rate. Furthermore, you need to understand what kind of covenants are in place to protect the lender – you. What sends the borrower into default, etc? It is also crucial to understand the terms of other debt that is potentially on the property. Which loan is in the more senior position and can, therefore, foreclose on another?
There's a lot more detail that needs to be understood, but this is a reasonable starting point.
To answer your example question, the "interests in LLCs" appears that you would be buying into five separate notes likely possibly secured by the same or different real estate. Can you provide a little more context?
One sign is when there is nearly universal agreement in the general population that things are looking up. Cabbies and your brother-in-law are rushing to buy, fueling the upwards trend. Now, who are they going to sell to?
This great quote by Nicole Foss explains it nicely:
By the time the new received wisdom has become so entrenched that there is almost universal agreement, there is virtually no one left to act on that opinion and carry that trend any further in the same direction.
Miranda Marquit has identified 6 signs of a bubble, which may help too:
See also the Broadstuff Bubble Beaufort Scale
And the Kevin Marks Omen: 'When expensively educated, fashionable young graduates start showing up in your field, you're in a bubble.'
Edit: as Neil Kandalgaonkar accurately points out in his answer, bubbles burst not because there are no more believers left, but because the believers are no longer able to borrow to buy into the bubble. To know it's going to burst, you need to figure out when people will no longer be able to borrow. Identifying current and potential lenders and probing lender psychology is thus probably key.
Total value of a position or portfolio including leveraged amount.
Learning is a continuous process. Each day we enrich our experience and knowledge by coming across new events and various interactions. Investors relentlessly strive to get their decisions right. Clinical precision is what they seek, some like Warren Buffet succeed, some other wannabe ‘Buffets’ are not as fortunate. The quest for new information and knowledge continues perpetually. Here are a few things which investors will find interesting and will aid them in their search for knowledge and perfection.
Life along with the various other components associated with it, are cyclic in nature. Life cycles and business cycles provide a fair idea of how the circular pattern manifests itself. A serious investor is also well aware that cycles have an important role to play in their TO READ MORE :3 Things to Check before Investing in the Stock Market
Investors are chasing yield as a result of the low interest rate environment. This is increasing demand for risky assets and therefore inflating the price, as supply has not increased in tandem with demand.
Be forewarned of the risk distortion in portfolios that this is causing. Interesting blog post shows a simple demonstration of how the high-yield bond market has grown. This is dangerous given the high default rates.
following Debt: Low Interest Rate Environment Driving Higher Risk
Makes me wonder if the Fed is creating a bubble in risky assets and when it will pop. That could be very dangerous.
The Fed attempting to control the economy's ups and downs is the "Fatal Conceit" Hayek spoke of