I'm Raising Private Equity - My New Model Threw Me a Curveball.

[Nate Pattee]

Officially my first BP post. Really hoping not to get booed off stage…

My experience to date at acquiring large multifamily properties, raising private equity, executing asset management strategies, then exiting the deals as expected, has been better than I could have hoped.

The challenge with every one of those deals is that they were short 12 - 24 month deals, a model I’m changing moving forward.

My new model will have me acquiring the same type of deals but holding them for 10 years.

During a few initial conversations with investors, the first question I get is a relatively new one (compared to raising equity for short term deals), which is “how do I get my money out before the 10-year deal horizon?” Makes sense. 10 years is a commitment and I’ve got to recognize investor’s needs.

I want to avoid a forced liquidity event (sale or refi) in an effort to keep my basis low in the deal.

So, what are a few options I could consider that would give investors a way out before the end of my 10-year deal? What challenges will I run into down the road with those options?

Boo if you must, I can handle it.  Thanks, Nate!