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Updated almost 5 years ago on . Most recent reply

User Stats

52
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Andrew Reyes
  • Investor
  • New York, NY
15
Votes |
52
Posts

Should I raise more capital than I plan to need?

Andrew Reyes
  • Investor
  • New York, NY
Posted

Hi All:

I am in the process of working through a business plan with my partner to execute on the BRRRR strategy. We have limited funds ourselves but family and friends have expressed interest in investing with us. If we expect to need $200k for our first deal, how much money should we target to raise?

How much capital should we have committed in excess of our project budget? Assuming this capital will only be called in the event we end up going over budget.

What is a good assumption for % of money we will actually have available to us when we find the deal? I assume not everyone who expresses interest in the idea of investing in real estate will actually pull the trigger when it comes time to write a check.

Thank you in advance for your advice and experience!

  • Andrew Reyes
  • Most Popular Reply

    User Stats

    764
    Posts
    951
    Votes
    Ivan Barratt
    • Investor
    • Indianapolis, IN
    951
    Votes |
    764
    Posts
    Ivan Barratt
    • Investor
    • Indianapolis, IN
    Replied

    Private debt (no equity) would greatly reduce YOUR cost of capital and increase your upside in a small deal.

    • Ivan Barratt

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