Approaching Investors & Raising Capital

[Ryan Cox]

Putting my thoughts down regarding a topic that seems to get a lot of questions on BP, approaching investors and raising capital.  

My focus is on multi-family real estate syndication.  I am constantly working to build relationships with new investors and expanding my investor network to achieve superior returns and share in the profits with my investors.  

I shared in a previous post Raising Capital for a 296 Unit, What did I learn? One of my key learning's was to build a brand and a track record that enables you to spend the most time qualifying investors to determine their desire to invest, capability to invest and ability to execute in a short time frame.

I put some more thought into @Michael Ibarra question about Approaching Physicians to Invest in Syndications and I think you need to do 3 things really well.

1. Be able to simply and clearly articulate your business plan/investment approach.
2. Be able to simply and clearly explain how they would share in the profits and what their role in the investment would be.
3. Building a track record with your investments & investors will organically grow your investor network through referrals.

What does an example of that communication to investors look like to simply and clearly articulate your business plan & approach?  

Ideas for an email/phone call to potential investors (returning investors) to set the 1st meeting to discuss investing in my next real estate deal.

• Recent Real Estate Experience.
  • I recently closed on a xxxx # of unit multi-family property in Dallas. The property was put under contract for $xxxx and appraised for $xxxx prior to closing in mid-September. The proforma for the Dallas property is forecasting xxx % Cash-on-Cash returns with a xxx % internal rate of return and total equity multiple of xxx over xxx years. We are focused on increasing the property’s value through cosmetic upgrades to xxx % of the units and improvements to the common areas of the property to achieve $xxx+ rent premiums.
• Expectations for Q4 (next project)
  • Currently, I am working to put another xxx # of unit Dallas multi-family property under contract which is being offered off-market by the current owner. I expect to see similar cash-on-cash and internal rates of return for this deal. I am raising equity for this project to share in the profits and returns with my fellow investors. I would like to set up some time to discuss this project with you over a cup of coffee to discuss potentially investing the project
  • What is the Ask? Ask for time to discuss the project over coffee, lunch, phone call, etc.  

Do you have a good example of what has worked for you? Or advice on what to avoid?

Thanks! RC