Proven Methods for Raising Capital

[Anthony Blanco]

Hey everyone,

I’m exploring different strategies for raising capital for commercial properties, specifically distressed office buildings that we aim to recycle in California. I know there are investment platforms where sponsors can connect with investors, often at a premium, but I’m curious about other proven methods that don’t involve purchasing a list of accredited investors.

For those of you who have successfully raised capital, what approaches have worked best for you? Whether it’s through networking, strategic partnerships, or creative financing, I’d love to hear your insights. Specifically, I'm interested in:

- Effective ways to connect with accredited investors who have an interest in distressed office properties without relying on paid platforms.

- Strategies for building relationships with potential investors that lead to long-term partnerships.

- Any unique approaches or tips that have helped you stand out and attract capital for projects like ours in the California market.

Looking forward to hearing your experiences and advice!

[Stuart Udis]

@Anthony Blanco In order to raise money you have to effectively sell yourself and the project/investment thesis. Track record goes a long way and if you are just getting started it's easiest to begin with your "friends and family" network. Even without a track record these individuals presumably know you as an upstanding and trustworthy guy and this means you only have to sell them on the merits of the real estate. Without a track record its difficult to secure capital commitments from those outside of your network. Once you take down deals successfully utilizing your friends and family network as investors you will have  a track record and can use that success to propel yourself into new capital relationships, some even by referral if you do good by your initial investors. 

Also, don't dismiss paying for capital raising. Capital raising can be extremely time consuming and can become a job in itself. I know plenty of investors who will happily pay one of the many firms out there who help place equity so they can focus on their core competency which is running their real estate business (me being one of who would gladly pay a fee so for access to equity and the ability to focus on what I do best as a developer). Unfortunately these placement firms tend to focus on larger check amounts. I've personally explored this myself but my typical transaction  size is $3-$8M and the required check sizes are too small for their services. If you are someone with a track record and are looking at transaction sizes that fit the profile of the check sizes these companies facilitate you shouldn't be so quick to dismiss them.