RE: Starting a Fund For Real Estate Developments

A

about2flip

Hi:

I want to start a fund to raise capital for developing apartment buildings. I don't have a circle of friends that will put up the minimum capital requirement. I have knowledge and experience in developing, but my company is new, and there is no track record developed yet.

In order to get an asset manager or a holding group to market the fund for me, how much capital commitment is to low for them to take on the task of helping me raise money.

I also need to know what will be the best route for me to take to get potential investors interested.

Any advice, suggestions, etc. is greatly appreciated.

Thanks in advance.
:)
 
Is that, "I don't have a circle of friends that will put up the minimum capital requirement" or do you mean, "I don't have a circle of friends that can put up the minimum capital requirement"?

Either way, I think that "there is no track record developed yet" would be one of the first obstacles, before what capitalization minimum a marketer would require before they have an interest in your project.
 
Quote from gms:

"before what capitalization minimum a marketer would require before they have an interest in your project. "
More...

Is that a question? I am looking to raise $500K to develop our first apt. building. I am asking is that too small of an amount to have a broker-dealer sell the fund? or am I better off networking with lead letters to accountants, doctors, etc.

What would your approach be?

Thanks again for your help.
 
No, that was part of one statement. In other words, without a track record to show, it won't matter if $500K is too small or not for those guys to work with, because you won't get to that point. Why would anyone invest with you if you've never done this before, when they can invest with outfits that have done so before and have a successful track record? Besides, you're talking about creating a fund, when you should be thinking in terms of a LLC for a specific project, and a fund is probably even messier to put together than a real estate deal. You should obtain financing another way and build your own track record. Make a deal with the builder for part ownership, make another deal with the right real estate broker to handle the sales exclusively. Finance the rest. See if local gov't offers any perks for building any certain type of building in certain areas. You don't have to flip each property to make money, though you could. You could also think in terms of keeping a part ownership in several of them just for building a revenue stream of passive income.
 
Thanks. I did form a LLC, which I guess I am under the regulations of a Reg D. So I really can't advertise, and I have to watch how I solicit the partnership.

Locating funds is not easy, so I am really trying to implement a plan to attract potential investors. Under Reg D regulations for a 504, I need to figure out what to do.

So I am just trying to get some ideas on getting potential investors without breaking Reg D Rules. Are there any sites that can help me out? or how would you approach it.

I appreciate your help and replies.
 
Thanks. I did form a LLC, which I guess I am under the regulations of a Reg D. So I really can't advertise, and I have to watch how I solicit the partnership.

Locating funds is not easy, so I am really trying to implement a plan to attract potential investors. Under Reg D regulations for a 504, I need to figure out what to do.

So I am just trying to get some ideas on getting potential investors without breaking Reg D Rules. Are there any sites that can help me out? or how would you approach it.

I appreciate your help and replies.
 
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