Oh, the woes of getting funding together for that very first deal!!! Some of you seasoned pros can remember what it was like when you first started. If any of you have used an equity partner in any of your deals I'd like to know how you did it. How'd you fund your first multifamily deal??????
Rental Property Investor · Coral Gables, FL · Member since 2016 · 199 posts · 266 votes
4y
@Darrin Yon, you are right! The first deal is really tough. You have to keep the faith that even if the next deal doesn't close, there will be others after it. Be sure to build relationships with fellow investors and syndicators and treat everyone well. This is a team sport and people have to know, like and trust you and vice versa. Networking is critical. Also offer to help others in their deals, even if you don't get compensated, as long as you learn.
I built a team of GPs who had been LPs and had raised small amounts for other syndicators' deals, then we found a deal ourselves and had others as GPs in our deals in return for helping with asset management, loan co-signing, capital raising, etc. Adjust your target deals to the capabilities of your team. And if your team needs expertise of a certain type, keep networking, attending meetups, conferences, etc. to find a partner to fill the gap.
Rental Property Investor · Coral Gables, FL · Member since 2016 · 199 posts · 266 votes
4y
@Darrin Yon, you are right! The first deal is really tough. You have to keep the faith that even if the next deal doesn't close, there will be others after it. Be sure to build relationships with fellow investors and syndicators and treat everyone well. This is a team sport and people have to know, like and trust you and vice versa. Networking is critical. Also offer to help others in their deals, even if you don't get compensated, as long as you learn.
I built a team of GPs who had been LPs and had raised small amounts for other syndicators' deals, then we found a deal ourselves and had others as GPs in our deals in return for helping with asset management, loan co-signing, capital raising, etc. Adjust your target deals to the capabilities of your team. And if your team needs expertise of a certain type, keep networking, attending meetups, conferences, etc. to find a partner to fill the gap.
Investor · Orlando FL · Member since 2018 · 64 posts · 69 votes
4y
After my first one I felt utterly wrung out! My husband joked that I didn't need to do all the hard things on the first deal But they don't really get easier, just different problems to solve.
Our first was a small 506(c) syndication for a 50-unit in SE Idaho. I found it on FB from a local friend who was thinking about selling it and just posted: it pays to have a network doing what you want to do!
Since then, we've done more deals as joint ventures with a couple of big check writers, and last year started closing deals as a club that pools our cash and negotiates for better terms, kind of like capital raisers, so we are small % non-managing members to help on asset management and protect our investment: when you bring in enough cash, you can choose what job you want!
Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
4y
Yes, the first deal (or two) will typically be the hardest until you can establish a record that the selling broker, lender and your investors will want to see (whether they tell you that or not).
The best advice would be to partner with an experienced sponsor who has their own network and team already established and play a smaller role. Once you get some success under your belt as a co-sponsor, then you can step into the role of a lead sponsor.
If you think you can raise $5mm on your first deal (based on soft commitments), plan on getting about $1mm when it comes time to get the funds.
After months of rejected funding, finally got a 250k HELOC. I've been looking for weeks, there's literally nothing out there cashflowing enough to pay Loan, HELOC, management, and all other rental expenses.
I fear it may be too late to enter the game at this point. If anyone has a legit portfolio or other cashflowing homes that aren't rehabbed, ductaped 30k projects, I'm ready.
Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
4y
Raising money is not easy. Especially when you don't have a big track record. On my first equity raise I was lucky enough to have a partner that had experience, so I was able to leverage his experience to raise the capital. This is a good strategy to maybe follow. Find a partner with experience that can help you on the raise..
@Darrin Yon, you are right! The first deal is really tough. You have to keep the faith that even if the next deal doesn't close, there will be others after it. Be sure to build relationships with fellow investors and syndicators and treat everyone well. This is a team sport and people have to know, like and trust you and vice versa. Networking is critical. Also offer to help others in their deals, even if you don't get compensated, as long as you learn.
I built a team of GPs who had been LPs and had raised small amounts for other syndicators' deals, then we found a deal ourselves and had others as GPs in our deals in return for helping with asset management, loan co-signing, capital raising, etc. Adjust your target deals to the capabilities of your team. And if your team needs expertise of a certain type, keep networking, attending meetups, conferences, etc. to find a partner to fill the gap.
Good luck!
I certainly appreciate your words of wisdom and this is a blueprint that I'll make use of, Thanks again, Mr. Stonebraker!
Raising money is not easy. Especially when you don't have a big track record. On my first equity raise I was lucky enough to have a partner that had experience, so I was able to leverage his experience to raise the capital. This is a good strategy to maybe follow. Find a partner with experience that can help you on the raise..
Thanks, Brock yes, it's a bit of a grind at the moment. I see having a seasoned experienced equity partner as an absolute must for me right now. What I know can only be enhanced with someone who can raise capital and has far more experience than I do. You're spot on my friend, thanks again!
After months of rejected funding, finally got a 250k HELOC. I've been looking for weeks, there's literally nothing out there cashflowing enough to pay Loan, HELOC, management, and all other rental expenses.
I fear it may be too late to enter the game at this point. If anyone has a legit portfolio or other cashflowing homes that aren't rehabbed, ductaped 30k projects, I'm ready.
Mr. Hunter, I don't believe it's too late for a sound investment at all my friend. You have those funds for a reason and I think there's a deal in the market with your name on it just as much as I believe there's one or many in the market for me! Last week was tough, sometimes it seems like my goals are too far to reach, but this tells me I'm on the cusp of success! Hang in there!!!!!!!
After my first one I felt utterly wrung out! My husband joked that I didn't need to do all the hard things on the first deal But they don't really get easier, just different problems to solve.
Our first was a small 506(c) syndication for a 50-unit in SE Idaho. I found it on FB from a local friend who was thinking about selling it and just posted: it pays to have a network doing what you want to do!
Since then, we've done more deals as joint ventures with a couple of big check writers, and last year started closing deals as a club that pools our cash and negotiates for better terms, kind of like capital raisers, so we are small % non-managing members to help on asset management and protect our investment: when you bring in enough cash, you can choose what job you want!
That's very encouraging Mrs. Powell and I plan to be in a very similar position in the future. You all offer sound advice in this forum and I certainly do not take it for granted. Thanks, again, and best regards on future investments.