So, you want to start a REIT?

[Steve Olafson]

I went to a convention that is geared toward putting the people with access to money (Broker/Dealers) with the people looking to raise money (sponsors).

It turns out that the measly $4,000,000 that I have raised in the past isn't even enough to warrant a conversation with anyone here. The smallest deal that I heard talked about was a $15,000,000 capital raise. People are talking about small $50M raises or $200M in 3 weeks!

There are other people like me here but they are trying to break into the business of private or public offerings. They are trying to determine how to get out onto the "platform" where the broker/dealers will be able to sell your deal to investors.

It turns out that there are a lot of challenges and a lot of big bucks need to be paid. My estimation is that you will need to shell out $200 to 500K or so to set yourself up. That will only get you part way into the "good ol' boy" network. 

For starters, you will need years of audited financials (very pricey) on your self and business. This will be scrutinized by a third party "due diligence" representative that you will need to pay for. You will also need to pay for the dd for the deal that you want to put on the table. Once this is done, you will need to schmooze the companies with dinners (I have done this, steak and lobster for 30 people. Don't forget the drinks!)

You will also need to have a track record to show along with a product that will set you apart from the others.

The regulatory group that oversees this process holds a lot of power. They regulate the **** out of every part of the process which adds a lot of cost and time.

There are salespeople called wholesalers that will work as your reps to sell the product. You will need marketing materials along with a dog and pony show.

I had an "in" with a small broker dealer. It took a lot of work to get that. They went belly-up in 2010.



This looks like it could be a lot of fun!