Question for HNWI's with $5,000,000

[Chris Hake]

I am looking for advice/counsel from anyone who understands the mindset and desires of someone that has $5,000,000 that would be interested to use to invest in a larger apartment syndication deal.  Either you worked with these types of folks on past deals or you ARE one of these folks. What does someone with this kind of resources expect for a return? Percentage of deal? Equity position? Flat fee for using funds? All of these? Something totally different?

What are they wanting/requiring to see from the skills/experiences of the Syndicator?  What questions am I not asking that I should to better understand how to best have this conversation? Thnx

[Brian Burke]

For these folks it’s a lot less about the return and a lot more about the strength of the sponsor and the likelihood of preservation of capital.  I recall one of these people once saying, “don’t try to be a hero, I’m already rich.  Just don’t lose my f#$&ing money!”.

They want experienced sponsors who also have wealth of their own, so that they are working with their peers. They have plenty of options so they are very unlikely to take a chance on a newbie.

So if you want to engage with these people as potential investors, forget about telling them about your great plan.  Tell them about all of the things you have done, and are doing.  If that story isn’t compelling, get more experience and track record and save the conversations with these folks for later.  You’ll get there one day.

If you do have a good story, still don’t talk about your great deals.  These conversations start with talking about you and then develop over months to even years before the talks turn toward deals and opportunities. Ultra HNW investors don’t make impulsive decisions.  These discussions move very slowly. But once you get there things move fast because they can write big checks and do it repeatedly. Just don’t rush it.