How to build a $12billion Private Real Estate Investment firm from scratch?

[FastLaner007]

Hey guys,

I came across a billionaire worth $4billion and it seems he made his money through his company, Ashkenazy Acquisitions. A little background on his company from their website:

Headquartered in New York City, Ashkenazy Acquisition Corporation is a private real estate investment firm focusing on retail, hotel and office assets. Ashkenazy Acquisition has acquired over 15 million square feet of retail, hospitality, office and residential properties, located throughout the United States, Canada and England. With a portfolio containing more than 100 buildings valued at $12 billion, Ashkenazy Acquisition has a superior performance history in purchasing and managing premier assets.

My question is how to start a firm like his with little to no capital? Did Ashkenazy raise money from investors initially? If yes, then how did he make money investing their money in real estate?

Thanks guys.

 

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[biophase]

He probably found the good deals and then got investors to invest.

 

[FastLaner007]

He probably found the good deals and then got investors to invest.

Thanks for your reply Sir. An article talks about him being the majority owner in the company. In this case how does he make money if he is investing in real estate using the clients' money? Does he or his company charge a management fee or have a profit sharing agreement? How is he making money if he is not investing his own money in the deals?

 

[SteveO]

There are a number of ways to do this. It will always start with successfully starting something on your own.

Typically someone that pulls investors together is called a sponsor. They offer their expertise to put deals together using a capital stack that may include lenders, investors, their own funds, etc.

Investors are offered some sort of potential return in exchange for their funds.

 

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[FastLaner007]

There are a number of ways to do this. It will always start with successfully starting something on your own.

Typically someone that pulls investors together is called a sponsor. They offer their expertise to put deals together using a capital stack that may include lenders, investors, their own funds, etc.

Investors are offered some sort of potential return in exchange for their funds.

Hi Steve! Thanks for the input. I am a software engineering graduate. Can I still start a company like Ashkenazy Acquisitions without my own money? I will try to get outside investors though. Any other way I can make this work?

Regards.

 

[Telamon25346]

I know very little about real estate, but I know somewhat about taking action.

The best way I would approach this is very straightforward. I'd simply go to open houses, the best place to meet real estate agents and investors. And get my feet wet. You can build some great relationships and friendships by simply talking with a couple of agents and investors, and if you're polite and you know what you want, some go out of their way to give you a chance. You could perhaps offer an investment deal on a property or something like that, then get the ball rolling.

 

[100ToOne]

With a name like Ashkenazy, he's probably got a powerful network behind him

 

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[Cruze]

Here a more Informations about himhttps://en.m.wikipedia.org/wiki/Ben_Ashkenazy

He started with the age of 18....is now 50...

 

[SteveO]

Hi Steve! Thanks for the input. I am a software engineering graduate. Can I still start a company like Ashkenazy Acquisitions without my own money? I will try to get outside investors though. Any other way I can make this work?

Regards.

Let's look at investor motivations and desires. They want a return with as minimal of a risk as possible. The view of any skeptic looking to invest money is to find the most knowledgeable and competent sponsor as possible.

To get started, you will need to convince people that you know what you are doing. You will also need to convince them that you will not walk away if things go bad. A track record showing successes is important. Also, having skin in the game will give people a security that you will not want to lose your own money.

To build a successful track record, you will need to do some deals on your own. This will take money.

The people that sponsor these large deals have skills that have been developed. You cannot match them without experience. You have to start and then build.

 

[motocoyote]

Hey guys,

I came across a billionaire worth $4billion and it seems he made his money through his company, Ashkenazy Acquisitions. A little background on his company from their website:

Headquartered in New York City, Ashkenazy Acquisition Corporation is a private real estate investment firm focusing on retail, hotel and office assets. Ashkenazy Acquisition has acquired over 15 million square feet of retail, hospitality, office and residential properties, located throughout the United States, Canada and England. With a portfolio containing more than 100 buildings valued at $12 billion, Ashkenazy Acquisition has a superior performance history in purchasing and managing premier assets.

My question is how to start a firm like his with little to no capital? Did Ashkenazy raise money from investors initially? If yes, then how did he make money investing their money in real estate?

Thanks guys.

Ashkenazy is a well-known firm in retail real estate, and apparently in office and hotels as well. I have encountered them in retail leasing and they are one successful firm among hundreds of similar firms nationwide.

When I say similar, I mean family-owned real estate firms that typically started as brokers or asset managers and became sponsors or developers. Just like SteveO said, sponsors are good at one or more of the following pieces of property investment: finding good deals; pulling together capital from third party investors; lining up financing; signing notes; managing and leasing property.

If you can deliver on one or more of the items above, you may be able to do it with little or no money of your own. There is ALWAYS money available for good real estate deals. However, SteveO said it perfectly as you will need to convince HNW individuals that you will be a good steward and operator of the property they are investing in. Real estate is highly illiquid and wrought with all kinds of risk for the uninitiated, and these people know that fact intimately, because typically your deal won't be the first real estate deal they have invested in.

It will take time, and more than anything, it will take dedication to the craft of real estate. If you want to explore further, I can recommend a few very good books on the subject:

Confessions of a Real Estate Entrepreneur, James Randel
Crushing It in Apartments and Commercial Real Estate, Brian Murray
Best Ever Apartment Syndication Book, Joe Fairless
Skyscraper Dreams: The Great Real Estate Dynasties of New York, Tom Shachtman

Good luck in your journey!

 

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[motocoyote]

Thanks for your reply Sir. An article talks about him being the majority owner in the company. In this case how does he make money if he is investing in real estate using the clients' money? Does he or his company charge a management fee or have a profit sharing agreement? How is he making money if he is not investing his own money in the deals?

To answer your question above, a syndicator makes money a couple of different ways. One, by taking an equity piece for the value he or she brings to the table. It is negotiable and varies from deal to deal, but typically you might see a sponsor take anywhere from 10-30% of the whole deal, or anywhere from 40-75% of the developer's side, as sweat equity, exclusive of any sponsor cash that is contributed. The sponsor can also take fees on the deal, such as acquisition or disposition fees, management fees, leasing fees and more. However, starting out, these may be less reliable and you want to always position yourself on the same side of the table as your investors and avoid overdoing it on the fees. There are also ways to arrange partnerships where split levels adjust after the initial investors are paid back with their preferred return, in which case the sponsor has the ability to increase his or her equity participation down the road.

 

[WJK]

Hey guys,

I came across a billionaire worth $4billion and it seems he made his money through his company, Ashkenazy Acquisitions. A little background on his company from their website:

Headquartered in New York City, Ashkenazy Acquisition Corporation is a private real estate investment firm focusing on retail, hotel and office assets. Ashkenazy Acquisition has acquired over 15 million square feet of retail, hospitality, office and residential properties, located throughout the United States, Canada and England. With a portfolio containing more than 100 buildings valued at $12 billion, Ashkenazy Acquisition has a superior performance history in purchasing and managing premier assets.

My question is how to start a firm like his with little to no capital? Did Ashkenazy raise money from investors initially? If yes, then how did he make money investing their money in real estate?

Thanks guys.

People who make it in the real estate business know their stuff. Go see 100 properties without buying anything. Then go see another 100 properties. And so on... Take notes. Study the different markets and sub-markets. Ask questions. Read. Learn the tax laws and advantages. Everything you need to know to start is out there. There are investment clubs you can attend and people who will talk to you. It's up to you to figure out what ideas you can use and which ones to discard. Some you will put on the shelf for the moment. And yes, there's a lot of BS out there, like in every business.

You will learn that real estate is a term for many different market segments. The commercial market is very different from the residential world. Residential income properties are a separate business model and skill set. Development and raw land have many levels and aspects.

Yes, you can become very rich in our business. BUT, you can also lose your tender &*$#. Just remember, you can't have salt without pepper. You will make mistakes since you will be taking calculated risks with real money on a daily basis. It's a steep learning curve that will really try your resolve.

 

[ZeroTo100]

He probably found the good deals and then got investors to invest.

As highlighted in the ABC’s of Real Estate...Great book!

 

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[ZeroTo100]

Let's look at investor motivations and desires. They want a return with as minimal of a risk as possible. The view of any skeptic looking to invest money is to find the most knowledgeable and competent sponsor as possible.

To get started, you will need to convince people that you know what you are doing. You will also need to convince them that you will not walk away if things go bad. A track record showing successes is important. Also, having skin in the game will give people a security that you will not want to lose your own money.

To build a successful track record, you will need to do some deals on your own. This will take money.

The people that sponsor these large deals have skills that have been developed. You cannot match them without experience. You have to start and then build.

Read about Nate Paul

The 30-Year-Old Texas Tycoon Who Is Building A Real Estate Empire

Young Texas real estate mogul Nate Paul has quickly amassed a billion-dollar portfolio. Imagine what he'll do when he turns 31.

www.forbes.com

Take notes!

 

[SteveO]

Read about Nate Paul

The 30-Year-Old Texas Tycoon Who Is Building A Real Estate Empire

Young Texas real estate mogul Nate Paul has quickly amassed a billion-dollar portfolio. Imagine what he'll do when he turns 31.

www.forbes.com

Take notes!

This is what I'm talking about. Fantastic story.

He did deals and gained credibility and cash.

 

[Zedd9165]

Hey guys,

I came across a billionaire worth $4billion and it seems he made his money through his company, Ashkenazy Acquisitions. A little background on his company from their website:

Headquartered in New York City, Ashkenazy Acquisition Corporation is a private real estate investment firm focusing on retail, hotel and office assets. Ashkenazy Acquisition has acquired over 15 million square feet of retail, hospitality, office and residential properties, located throughout the United States, Canada and England. With a portfolio containing more than 100 buildings valued at $12 billion, Ashkenazy Acquisition has a superior performance history in purchasing and managing premier assets.

My question is how to start a firm like his with little to no capital? Did Ashkenazy raise money from investors initially? If yes, then how did he make money investing their money in real estate?

Thanks guys.

You need a name like Ashkenazy and history like ashkenazy to be like him.

 

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[FastLaner007]

You need a name like Ashkenazy and history like ashkenazy to be like him.

I disagree. A fastlaner can imitate his success without the attached name.

 

[Zedd9165]

I disagree. A fastlaner can imitate his success without the attached name.

Well, I don't say it's impossible to imitate his success. You can well give it a try. What I'm trying to convey here with my post is that this guy would have probably had some good network to pull off these deals.

 

[Matt Hunt]

Can you do it with no money? Yes. Will it be extremely difficult? Yes.

If you don't have any experience or money in the deal, then you better be bringing enough value in other areas to make up for it. So you must be very knowledgeable, have found & negotiated an absolute killer deal, or perhaps teaming up with a co-sponsor who does have money/experience.

With no money, your best chance is to start small and work your way up. That way you can gain experience and build a track record. As properties get bigger, the concepts remain mostly the same, the numbers are just bigger.

Also, I think it's best to stick with one property type, as there are a lot of differences between types, and at any given time, one may be hot, while another is cold. So, only do multi-family, or only do retail, etc.

Join some local real estate investing groups. You'll get some good info there, network with other investors, and get a better idea of how you could make something like this work. For me personally, after going to several meetings, I decided I really just want to be a passive investor. I may become a sponsor later down the road, but at this point, passive investing works best for me.

 

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[TurtleSprint]

Hi Steve! Thanks for the input. I am a software engineering graduate. Can I still start a company like Ashkenazy Acquisitions without my own money? I will try to get outside investors though. Any other way I can make this work?

Regards.

Hey @FastLaner007. Just my input from relatively little experience so far. These guys/gals are right, it's possible to start with little or no money but will be difficult. I was fortunate to get assistance from an outside investor AFTER working two investment projects on my own. Now that I have a couple under my belt and made that investor successful, he and some others have been more open to exploring new projects. Far from Ashkenazy but it's a start and you can see how this would create a snowball effect.

Like a few have said, the best and most critical key to getting these is showing that you know what you're doing and can HELP the investor make more money. It all comes full circle back to providing value. I think you have a great foundation being a software engineer (I too am an engineer).

Good luck.

As highlighted in the ABC’s of Real Estate...Great book!

@ZeroTo100 Funny you mention it, that was one of my first reads post-Millionaire Fastlane and I'd 100% suggest to anyone starting out. Was a personal recommendation to me from a fellow investor who's now killing it out there.