Updated almost 5 years ago on . Most recent reply
Raising capital to keep up with opportunity
My question: For seasoned investors, have you had success bringing someone in to help raise capital for projects? If so what did that structure look like? Where they salaried? % of capital raised? Partner? I am sure there are different ways to go about this but interested to hear different experiences that worked.
Background on us if the context helps
The quick summary of our business is in 2020 we have purchased about 10.5 m in RE in one New England town. We currently are developing 28 luxury condo units across 5 projects and have some holds/airbnbs. Average deal size is 3-10 units. These developments are either full gut rehabs in the realm of 300-400k per project to new construction around the 1.1m. We self perform the construction management due to terrible experience hiring GC's in our area.
Being extremely focused geographically has worked well for us. The last few years we have learned who the players are and know the town intimately. Which in turn our off market deal flow is through the roof right now, over 100m. But where our business needs support is on the capital side which is purely due to time available. From operations of the business daily and then the managing of projects, it really does consume both myself and my business partners full effort 6-7 days a week. Which we are happy to do because we love RE and have done pretty well so far on the return front. Basically our deal flow and ability to execute has outpaced the capital we have to acquire deals to hit the runway that I have forecasted through our 2021 strategic planning effort in Q4.
My question to the more seasoned investors out there is, have you had success trying to bring someone in to help raise capital, or find investors to set meetings? I know this is not a challenge that I am alone in tackling, and with our decision to self perform the construction management side (which I am not willing to give up because of the level of quality we hold ourselves to) the obvious first answer, "hire a GC" I don't think is the right solution at least for our business.
Sorry for the long post and I appreciate any and all insight.