How to find funding

Question

Hi Everyone,

I am working with my partner on a relatively large deal (1000 units, $100M, 25M down). Any ideas on how to find investors or even private equity? Any suggestions or leads are highly welcomed! Thanks again!

Neal Patel · Answer

Thank you all for your insight and responses. So far we have done full due diligence, have secured debt lending but still are trying to come up with the equity portion. We have reached out to larger equity partners. The property is 90% occupied. Any suggestions for specific large equity firms outside of CBRE, JLL?

Stuart Udis · Answer

@Neal Patel you will need to attract both debt and equity.  The debt will be concerned with the real estate, operating experience and balance sheets of the guarantors.  Equity partners will take a deep dive into the real estate,  proposed structure and the sponsor. You and your partner as the sponsors should be able to articulate the value you bring to the deal. Merely locating a good deal is not in itself marketable today where there are plenty of opportunities.  The equity partners also want to understand where the GP's capital contribution is coming from and who is responsible for the debt? A larger deal as you propose will often have a silent or Co-GP whose balance sheet is relied upon. There is nothing wrong with this, but the LP's will want to understand who all of the players are. Lastly, you are likely going to be seeking some larger check writers. This is a more sophisticated form of capital, so its best to retain top tier legal and accounting advisors. This will be expected by the capital you are trying to attract.

Robin Simon · Answer

For deals that size and with presumably not much experience, you are probably best served contacting some of the larger CRE brokerages such as CBRE, JLL, etc.

Barry Ruby · Answer

Hi Neal,

Do you own or have the property under control?

Have you conducted a pro forma analysis to determine feasibility and financial performance?

Have you made an investment proposal that spells out the amounts, timing, and application of the funds you are seeking and shows the performance metrics on the Project and Stakeholder levels?

Do you have a track record to demonstrate your ability to do this "relatively" large deal?

If you have not done any or all of these things, your search for debt and equity capital is premature.

Please feel free to let me know if you need/want any clarification on the above