All Forum Posts by: Badri Malynur

Quote from @Brock Mogensen:

Syndications and funds are slightly different.  Syndication is a deal by deal raise. Fund can be invested in several properties.  Generally, people start with syndications.  Because raising capital tends to be easier when investors know what deal they are investing in up front.  The end goal does tend to the fund model though. 

 Customizable funds combine the best of syndications and funds. Investors invest in the fund but have the ability to pick and choose an individual deal. As you indicated doing a lot of syndications is not a scalable model.  Happy to provide more details if you would like to reach out. 

@Glenn Barlow 

Good question, the traditional blind pool fund has several disadvantages , people are reluctant to invest in someone without a strong track record if they cannot review each deal. You also do not have the flexibility to change the business model and under pressure to deploy capital you have raised.  A customizable fund like the ones offered by Avestor overcomes many of these advantages and combines the best features of syndications and funds. Investors can choose which deal they invest in and you get substantial legal, compliance and other tax savings compared to doing one deal at a time.  If you want to reach out to me I am happy to go into the specifics. 

Glenn are you planning to use this for doing your own deals or capital raise for others. Do you plan to use any of the exemptions, 3 c1, 3c5 or 3c7 etc.
Are you looking to create an open ended fund? We have helped dozens of people start their own unique  evergreen customizable fund which combines the best features of individual syndications and blind pool funds. If you are interested, please reach out.

I would suggest you join gobnetwork.com , great network of people who can help you with all aspects of getting started and the best part is that it is completely free :-)

Another alternative is to create a fund of funds. We have a unique customizable fund platform that allows you to raise money one deal at a time instead of a blind pool fund that forces your investors to invest in each deal. Think of it as new way of doing syndication deals and still get a co-GP stake. Happy to discuss this further if you want to reach out. 

@Greg Scott  you are completely correct that traditional blind pool funds have this problem where sponsors are forced to deploy funds quickly, customizable funds like those provided by Avestor combine the best features of syndications with blind pool funds allowing sponsors to raise money one deal at a time but in the context of a fund. Investors can choose which deals they want to invest and still get a single K-1. 

Hello all,
As we approach what is very likely a recession or at the very least the economy slowing down what structure (syndication,  SPV,  fund, fund of funds) do you think would work best for capital raising?
Investors  are more reluctant to make single large investments, tend to seek diversification and seek out trusted advisors and a portfolio that has more points of liquidity during times of recession. I feel investors will migrate more away from syndications towards funds as funds provide a better solution. 

Fund of funds especially customizable funds like those provided by Avestor offer investors the ability to pick and choose which investment they want and how much they want to invest in each deal and have multiple points of liquidity.  Customizable Fund managers also can play the role of a trusted advisor and build a well balanced portfolio for investors  that is custom built for each investor instead of trying to sell them one deal at a time.  

Investors are more sensitive to overhead costs during times of recession. Customizable funds are also a lot cheaper and have less overhead compared to doing one syndication deal at a time and combine the best features of syndications and funds. 

Thoughts?

Good article Jorge, the person who can take a wholistic approach to an investor's portfolio and offered a well balanced mix of risk and reward has a much better chance of breaking through to investors in this environment

Quote from @Chris Seveney:

Quote from @Roschelle McCoy:

Scott brings up some good points, but I know a number of syndicators with great track records that continue to offer investments to non-accredited investors because they are serving a higher purpose: to make investments available to more people so that they can grow their wealth and become accredited. What I love most about REI is the free sharing of information, learning and giving others a 'hand-up' to help them become successful. There are many ways one can do this; having investments available to non-accredited investors is just one of those.

I'm happy to make intros to groups that I invest with that have offerings for non-accredited investors.  

 Roschelle

I agree. For example, we do not target most real estate investors (ie. people on BP). Why, because real estate investors typically are ok with higher risk higher reward. They also typically can put in $25k - $250k. What if you had an offering that targeted non accredited investors, especially people with $5k-$10k sitting in an IRA, did not want to put it in the markets because of volatility and had an experienced syndicator who would give them a decent preferred return. There are a lot more people willing to invest $5k-$10k in a syndication if they can than people wanting to invest $100k. Tell those people you can get them 8% and they get excited. Tell an experienced investor you can get them 8% and they laugh. Comes down to knowing your product and who to target.

I completely agree, putting $50K - $100K per syndication deal is more than most people feel comfortable. That is precisely why we have build the customizable fund model at Avestor where people can invest lower amounts per deal within the infrastructure of a fund and still pick which deals they want and get a single K-1

Customizable funds like the ones provided by avestor provide the best features of syndications and funds  you can still raise money one deal at a time but get all the benefits of a fund