3 Ways to Vet an Investment Opportunity

3 Ways to Vet an Investment Opportunity

There are 3 ways to vet an investment opportunity. From time to time, we all get the “hot tip” about an investment opportunity or new business venture. These “can’t miss opportunities” are often fast moving, and you need to make quick decisions.  Whether it’s a real estate purchase, a niche investment opportunity or a start-up business, there are general guidelines that may be helpful to consider when deciding how and if to proceed.

3 Ways to Vet an Investment Opportunity

  • Management team:

Whether it is real estate, investments or a new business venture maybe you should ask:  Who is behind the opportunity and what is their experience? While we all know to be wary of a proposal or return that sounds too good to be true, knowing who you are dealing with, their track record and experience in this particular field may go a long way to get you comfortable that this venture has a chance for success.

  • Other Investors:

Check out the other investors when you are approached about an investment opportunity. You might want to wait to see the size of their investment. That could give you comfort that you are not throwing your money away investing in a project that may never get off the ground. Yes, the first-in are promised a greater return,  but it is safer to wait until the group is closer to its ultimate goal.  It is also important to know the relationship between those seeking the money and the investors that have already infused the group with cash. While a third party investor with experience can add credibility, money from “Aunt Sally” should give you know comfort.

  • History:

A group seeking your investment has been in business for a while. If they are looking to expand, they should be able to show you their history. Any existing company worth investing in should have clean books and records. It may not be a bad idea to also speak to their bookkeeper or accountant. These financial professionals can provide you just insight into the cash flow of the business.

Remember:

If a group or individual is approaching you to invest in a rehab project, rental properties, start-up ventures, secondary market structured settlements, franchises, or any of the myriad of legitimate opportunities, They should bend over backwards to give you what you need to invest your hard earned money. If they can’t provide you with the comfort, move on- you aren’t missing any opportunity you are avoiding a mistake.

About the Author:

Kathy Manson is a Finance Coach and Blogger. Currently, she is working on cash for structured settlements at www.catalinastructuredfunding.com. She is very proactive and aware about each and every update of financial changes in the industry.

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