How do you bring large deals to potential investors?
Member since 2022 · 29 posts · 9 votes
I have had a rental property that the sell will close on very soon. I am 1031 into more properties as that happens, and look to diversify my portfolio with SFH and small MFH in a great appreciation area.
Since I have been working with a real estate agent for some time, he also brings me deals on larger multifamily, apartments, and commercial deals. I don’t have the capital for this type of deal but would LOVE to be involved. My question is, how do i find the investors that would be interested, and how do i make a case to not only partner, but take the property on as s/he would be financially responsible in a large way as opposed to the small percentage i could contribute. Or is this the type to simply wholesale, and if so how do i go about presenting this deal to someone interested in that?
Examples - 30-50 unit portfolios or large “neighborhood apartments” in the 5-7 million list price range.
I have had a rental property that the sell will close on very soon. I am 1031 into more properties as that happens, and look to diversify my portfolio with SFH and small MFH in a great appreciation area.
Since I have been working with a real estate agent for some time, he also brings me deals on larger multifamily, apartments, and commercial deals. I don’t have the capital for this type of deal but would LOVE to be involved. My question is, how do i find the investors that would be interested, and how do i make a case to not only partner, but take the property on as s/he would be financially responsible in a large way as opposed to the small percentage i could contribute. Or is this the type to simply wholesale, and if so how do i go about presenting this deal to someone interested in that?
Examples - 30-50 unit portfolios or large “neighborhood apartments” in the 5-7 million list price range.
@Lee Whitford I mean, pitching to potential investors is an art form. Make sure you prepare a sound pitch deck. Real Pitch Anything by Oren Klaff. You are going to have to meet with a lot of prospects and expect a lot of no's. You will be able to leverage your previous experience to some extent but the real focus has to be on the deal. Make sure you show all the pros and the cons. They need to know how much they may lose if the deal fails. Here's is the book (no affiliate association): https://www.amazon.com/Pitch-A...
You will find it hard to get any audience and interest with strangers, so you need to develop a network and maintain it. Read books and attend podcasts on deal structure etc. Perhaps join a local REI or LL association and attend meetings. It will take some preparation, work and time.
Good question. What you are referring to is multifamily syndication. In these types of deals, the deal sponsor or general partner syndicates the deal meaning they raise money from limited partners that fund their deal. So, a syndicator pools money from various sources to fund large apartment buildings. Most deals of a larger size will also need bank financing. So, syndicators use bank financing in conjunction with the private lenders called LPs or limited partners. To find multifamily Syndicators is easy. Just network and build relationships so you can form a team. There are groups you can join and virtual networking events to meet other syndicators who are even sometimes LPs on deals. The key for you would be to find an off market property. Don't use realtors that list there properties because syndicators want off market properties and if you can find one without a realtor by using Costar, Reonomy or Prospect Now software, that that is even better. Also these deals are governed by the SEC if you pool money so you definitely need a lawyer. If you just want to joint venture, that is the same way. Network to find joint venture partners to take down larger deals. There are multifamily meetups virtually every week and people nationwide are in these groups and attend these meetups.
I have had a rental property that the sell will close on very soon. I am 1031 into more properties as that happens, and look to diversify my portfolio with SFH and small MFH in a great appreciation area.
Since I have been working with a real estate agent for some time, he also brings me deals on larger multifamily, apartments, and commercial deals. I don’t have the capital for this type of deal but would LOVE to be involved. My question is, how do i find the investors that would be interested, and how do i make a case to not only partner, but take the property on as s/he would be financially responsible in a large way as opposed to the small percentage i could contribute. Or is this the type to simply wholesale, and if so how do i go about presenting this deal to someone interested in that?
Examples - 30-50 unit portfolios or large “neighborhood apartments” in the 5-7 million list price range.
@Lee Whitford I mean, pitching to potential investors is an art form. Make sure you prepare a sound pitch deck. Real Pitch Anything by Oren Klaff. You are going to have to meet with a lot of prospects and expect a lot of no's. You will be able to leverage your previous experience to some extent but the real focus has to be on the deal. Make sure you show all the pros and the cons. They need to know how much they may lose if the deal fails. Here's is the book (no affiliate association): https://www.amazon.com/Pitch-A...
Good question. What you are referring to is multifamily syndication. In these types of deals, the deal sponsor or general partner syndicates the deal meaning they raise money from limited partners that fund their deal. So, a syndicator pools money from various sources to fund large apartment buildings. Most deals of a larger size will also need bank financing. So, syndicators use bank financing in conjunction with the private lenders called LPs or limited partners. To find multifamily Syndicators is easy. Just network and build relationships so you can form a team. There are groups you can join and virtual networking events to meet other syndicators who are even sometimes LPs on deals. The key for you would be to find an off market property. Don't use realtors that list there properties because syndicators want off market properties and if you can find one without a realtor by using Costar, Reonomy or Prospect Now software, that that is even better. Also these deals are governed by the SEC if you pool money so you definitely need a lawyer. If you just want to joint venture, that is the same way. Network to find joint venture partners to take down larger deals. There are multifamily meetups virtually every week and people nationwide are in these groups and attend these meetups.
Thank you for the response. I should have mentioned that these deals he brings to my attention are off market. So my question would extend here to, how can i find a syndicator who might be interested? These deals are obviously live now, so unfortunately due to my poor planning i do not have the time to cultivate deep relationships with LPs etc. Are there syndicators who would be interested in taking “control” of these deals should i bring them to them?
@Lee Whitford depends on the market you are in and the quality of the deals.
e.g. We would be interested in off-market deals that are 150+ units, 2000+ vintage in the $20-$80mm range in the markets that are up and coming.
Lee,
Finding the investors can come from several places: your network, prospecting on websites like here, or even talking to brokers who are also investors. I'm in mergers and acquisitions for business, and how we began with bringing in investors were starting small with friends and family; we present them with the potential ROI for small, mid, and large amounts (in one case, 5K, 50K, and 100K), we offer different opportunities such as profit sharing agreements over a specific number, more involved equity opportunities, first in first out agreements, etc. Generally, they all wanted to start with something like 5K, and we showed them the numbers on how the ROI and time horizon beat stocks, etc. Once you successfully paid them back nine times out 10, they reinvested more money and started to generate a buzz around their networks. From there, the network did the heavy lifting, and now we have an investment fund. More prominent investors connect with us through personal networks or business brokers we have built relationships.
Feel free to reach out if you're looking for people.
I have had a rental property that the sell will close on very soon. I am 1031 into more properties as that happens, and look to diversify my portfolio with SFH and small MFH in a great appreciation area.
Since I have been working with a real estate agent for some time, he also brings me deals on larger multifamily, apartments, and commercial deals. I don’t have the capital for this type of deal but would LOVE to be involved. My question is, how do i find the investors that would be interested, and how do i make a case to not only partner, but take the property on as s/he would be financially responsible in a large way as opposed to the small percentage i could contribute. Or is this the type to simply wholesale, and if so how do i go about presenting this deal to someone interested in that?
Examples - 30-50 unit portfolios or large “neighborhood apartments” in the 5-7 million list price range.
Hi @Lee Whitford - I've read all the replies and all are informative and give you a starting point. For me, I would underwrite these "Off market" deals as they come and see the potential. If numbers make sense, I can help partnering with my close friends who are also investors and run syndication (GP's). I am also trying to shift from owning single family homes to multi family and looking to partner and also work together, either as GP or LP on deals in cities/neighborhoods that are booming. I am a managing partner on 1 deal (300+ units) and LP on two other deals. I am looking to expand and build a team of like-minded folks to build trust, money and change lives in a positive way. Please let me know if you're interested in talking 1:1 and we can discuss further.
Thank you,
Navi
@Lee Whitford dealing with multifamily syndication can be tricky when starting out. It is good you have a deal flow, but often times a seller will not entertain offers from someone without experience and lenders will not provide funds either. My advice is to partner with individuals who have experience. Having a deal funnel is value you can bring to a sponsorship team, you will just have to find individuals you can work with, Biggerpockets is a great place to start. Please shoot me a PM if you have any other questions, good luck!
Syndication is one way to do it, if you are looking to be the operator (GP) and have silent investors in the deal (LP). You may also want to look into Joint Venture structures, if you want everyone to be actively involved in the deal.