LP Equity Sources

[Stuart Udis]

Interested in building relationships with LP equity sources who have interest in deploying capital in the Philadelphia market. Thus far, my limited quest through BP has led to a recurring pattern: One person who provides introduction to another and then yet another and finally to a lender who asks if there's unencumbered real estate that can be cross collateralized. This is not LP equity, nor the process by which I am seeking. If there are better platforms to formulate these relationships, I am intersted in hearing others suggestions on this subject as well. 

[Chris Seveney]

Quote from @Stuart Udis:

@Chris Seveney You affirmed my suspicions.  All of a sudden everyone believes they can syndicate and be a GP… it’s scary. I’ve also learned there are novice investors who pay fees to learn how to syndicate and raise money. While some appear to be realistic and genuine with their teaching methods others teach their “Students” to exaggerate their track records and capabilities by associating with more established  syndicators who have more of a proven track record. Meanwhile the few LP investors I’ve communicated with thus far seem to value ROC and speed of distributions above all else while neither event is tied to the underlying real estates performance or any planned realization event. It’s merely return of capital that’s being distributed in open ended syndications that are over subscribed at the start. I certainly won’t want to be the LP’s when new investors stop coming through the door. 

 Stuart - I 100% agree with your opinion. While everyone has to start somewhere, that somewhere is critical. For example I started working for an ENR top 25 contractor where I managed a good amount of construction projects in 15 years there. I then worked for a developer for ten years and let me tell you - going from the GC side to developer side - very different. I could not have been a sucesful developer after only working for a GC, and a successful developer needs to understand the GC side and how things are built (or they will get screwed on every change order).

Being a Co-GP you can absolutely learn the management side of the syndication, but the asset itself, underwriting etc. that is only done with experience and if the syndicator does one or two deals etc. that is not enough. you should be underwriting several deals a month to get good at it.