All Forum Posts by: Tom Dittrich

You make a good point and I've been doing quite a bit of thinking about this. Allow me to explain further.

Most physicians don't know how to get into private equity. They imagine its this super secretive under the radar business, when in reality it's all around them. This service would bridge the physicians to the deals without them having to learn how to vet a syndicator or a deal. It would also diversify for them. So instead of talking to 5 different sponsors, they just talk to me, a fellow colleague. There is built-in trust there. I can't run off with their money since I'm a practicing physician right in the trenches with them. 

I am concerned about diminished returns, especially in our climate moving forward. I would say 10% plus in a tax efficient way and folks will be happy. My goal is not to "take" from these people so I think I will have to find a way to negotiate better terms for the group with the sponsors themselves in order to keep the returns adequate. 

Thanks Kent. I’ll send you a PM and hopefully we can touch base this week. 

 It’s about 15k in legal fees for fund number 1. Capital raise is 1-3million, and can be structured so fund covers legal fees. 

Hello all,

-I started an investing group for physicians. We have 1350 members in just 3 months. The group would like to pool capital and invest in real estate.

-Initially I planned to syndicate myself. I am starting to wonder if doing a "fund of funds" approach and taking the capital and diversifying into 3-5 syndications would be a simpler approach for the first capital raise. It would be a 506(c) so that using our Facebook group and website would be compliant. We have the option of a blind vs semi-blind fund, open or closed, etc. 

-As fund manager I would vet the sponsors and deals and invest the capital for the group, taking a 2% AUM fee and 20% of profits above a certain benchmark IRR. I am thinking our first raise would be somewhere around 1-3million. I do have a website in development and am interviewing investor portal software companies now. I think I could provide a fairly clean investor experience for the docs, who really want to be in real estate but don't want to spend the time with education or hunting for properties.

Has anyone done this before who would be willing to offer some advice?

Good idea, bad idea?

Any tips on the best structure for what we want to accomplish?

Thanks!

Tom Dittrich

I loved the book cited in the original post. Very thorough and detailed, yet simple explanations.

I am starting a fund for physicians to pool capital and invest in multiple syndications with the fund. We have 1350 physician members thus far. Goal raise for fund 1 is 3million. 

We don't need fund #1 to be a homerun. Just want to get on base with IRR 10%+. With the right sponsors are we looking at at least hitting those numbers in 2021-2022? Or could we see negative returns for part of this period?

Just as a follow up for those who read this thread. I spoke with a contractor today who has completed over 1000 units in Charleston. Average costs for this area were 125k-145k for this builder, not including land and other soft costs.

Investment Info:

Single-family residence commercial investment investment in Charleston.

Commercial Airbnb in downtown Charleston

Is there a good resource for helping to estimate development costs for Medium size multifamily complexes?

I’m sure there is a wide range so for context we are thinking about 3-4 story garden style, pool, workout room, game room. Your modern class A apartment complex.

A ballpark range on a per unit basis would be helpful or a resource to find out more would be great too. Thinking about a development of between 50-100 units in Mt. Pleasant SC.

Thanks

Tom

Appreciate your insight Jason. I will try and make more contacts with brokers. This was the route I took with the commercial Airbnb. Once I found the right agent I started to get all the off market deals. Seems even more true in apartment complexes.