Raising capital (Private lending)

[Michael Williams]

How would I be able to find a private lender for a commercial property deal. It'd be for my first apartment deal, should I hire a securities lawyer? Do I need to create an LLC? Looking off a money partner or someone to help me raise capital exclusively.

[Account Closed]

Originally posted by @Michael Williams:

How would I be able to find a private lender for a commercial property deal. It'd be for my first apartment deal, should I hire a securities lawyer? Do I need to create an LLC? Looking off a money partner or someone to help me raise capital exclusively.

Most apartments of 60 units and above are bought by syndications. Most of those are brought to the market by commercial brokers and they offer to seasoned syndicators (friends and associates) first. To be a syndicator you need an attorney to prepare the documents and that runs around $15,000. Then you can offer to accredited investors. The bank will want you to have at least one investor with a net worth of the amount borrowed. So, if it's a $3,000,000 purchase and you intend to raise $1,000,000 & borrow $2,000,000 there needs to be one investor with a net worth of at least $2,000,000. Then you can bid on the properties the brokers bring along. ZKeep in mind that it's very competitive right now with Hedge Fund money out there.

A much simpler way is to buddy up with a friend or a group of friends and form a Joint Venture that buys the building using your own money. Since the focus by the big boys is generally over 60 units, you might consider focusing on 20 units to 60 units until you get your footing and understand how the system works.