Updated over 1 year ago on . Most recent reply
I've found a Hedge Fund to work with.
Recently a guy that I met on these board has contacted me because he had a guy that was behind a hedge fund looking to purchase in my area. I talked to this guy and he will be flying out here to meet with me in a couple of weeks. My question is, has anyone had any experience with hedge funds?
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They have very deep pockets, and if you you are looking for them to fund your business and don't mind working for free, they can keep you going until you burn out. I had a HF offer me $25 million to start, and would go up to around $200 million for buying houses to hold. I turned it down. Not because I wasn't interested, in fact I had spent a LOT of time trying to secure such a deal, including meeting with over a dozen of these groups throughout the country. I passed because the terms just didn't cut it. I've seen term sheets from some other groups (to other operators that actually DID strike a deal) and they weren't too bad...so I guess it really depends on the fund.
Are they discussing funding you, or just buying houses from you if you find a good deal or have a house to sell? I've sold about a dozen of my flips in the last couple of months to two different HFs. They paid full market value (or more), they paid cash and closed in two weeks, so if you own some houses and you want to sell them, they'll be a good buyer for you.
Now, if you are looking to do very large multifamily deals, that's a different story, but I'm not thinking that is the direction you are suggesting.