Why Not to Launch Real Estate Startup? Oleksiy Nesterenko

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Why Not to Launch Real Estate Startup? Oleksiy Nesterenko
16.03.2016 13:34

Why entrepreneurs launch real estate shouldn’t related startups, and is wholesaling properties a much smarter move?

New tech startups seem to be popping every few nano-seconds these days. There is no question that this is an awesome time to start a new business. Capital is pretty easy to come by, Americans are bullish on the future, private individuals are willing to bet on the future, technology has made kicking off a new venture a breeze, and real estate has been booming. However, this doesn't automatically mean that a new real estate related tech startup is a wise or profitable move right now.

While this has become an increasingly popular trend, it is exactly this popularity which also makes it less profitable for those attempting it now. There are a number of reasons to stop and rethink if this is the best path.

 

The first and most common issue is that it has already been done. Far too few of those contemplating a tech related real estate startp fail to do any thorough market research. If they did most would find that their 'revolutionary' idea has already been done a dozen times.

 

This is definitely true of most search related startups. Then there are they truly delusional that are thinking of setting up 'new' real estate portals for 'unlisted' properties. Obviously, once it's online it isn't really 'off-market' anymore right!

The second major consideration according Oleksiy Nesterenko Startup Finance should be money. While the internet is saturated with get rich quick advice for setting up a website and making a mint tomorrow; that's a rarity in reality. Most have no idea what it will really cost to build a seriously competitive website and promote it. Just remember you will be competing against startups that have received millions in venture capital funding from the likes of Google, and who aren't under any pressure to make money fast. So if you don't have bigger pockets or need to turn a profit sometime soon there may be a better approach.

Case Study of Oleksiy Nesterenko Starup Finance

Oleksiy Nesterenko worked as an Acting CFO at a real estate startup

Background:

Recently established real estate development startup was seeking to fill a role of a CFO to head the company’s finance and investment functions, yet on affordable terms.

Challenge:

Aware of the need to have effective financial management and investment procedures, the client wanted an immediately available experienced and professional expert. Yet the company had to be cost conscious at this early stage of their development.

Oleksiy Nesterenko’s role:


Developed capital structure of the company and its investment strategy

Led acquisition and subsequent sale of a distressed real estate asset in regional Russia

Provided comprehensive financial analysis for acquisition of a development site with the view to develop retail centre, and liaised with equity partners in analyzing and structuring the investment

Played a key role in financial planning and structuring of sale of a strategic stake in the company








 

Outcome:

The client realized that the finance department could be handled just as efficiently through an outsourcing solution, and benefited from having expert help on affordable terms.

Oleksiy Nesterenko is a co-founder of Afenest Advisory, a financial advisory firm that provides guidance to clients in areas of corporate finance, business strategy and M&A and has setup OLEKSIY NESTERENKO STARTUP FINANCE consultancy that provides the needed financial and strategic insight that enables businesses to thrive.

Visit him today at http://www.oleksiy-nesterenko.com/ and get the professional services for your business growth.

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