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Where to find Investors?

Corrado79

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Sep 24, 2007
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Santa Monica, CA
Hi everyone. Once again, I come to this wise group for guidance. For those who don't know me, I've recently begun the RE investing game a little over a year ago and now have a few condos and duplexes under my belt.

I am now looking to make the (relatively) big switch to commercial development. I recently got a 50-unit apartment complex under contract (new construction). It is a fantastic deal for a variety of reasons, and should sell itself, but I need to find additional capital investors to get it done. I have about 30-60 days to round up about $500,000 in funds. The question for this forum is: Where do I find these investors?

I have gone through the typically avenues (friends, family, business colleagues, etc.) and have got some funds so far, but I need much more. For those with experience in lining up investors in commercial property, where would you suggest I look next?

Thanks in advance!! :thumbsup:
 
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fanocks2003

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Mar 31, 2008
1,319
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Sweden
Have you setup an LLC structure of some kind?

Maybe you can offer a guaranteed monthly return on investors money and with a clause that says you will pay the investor/s his/their money first (before you get any cut of any gains) would attract investors with a lot of cash.

Why not go to an angel investor network and see if someone would be interested in your deal? Why not? Maybe some angel investor would be thrilled to invest. Doesn't hurt to try it at least. Shame on those who never try;).
 

SteveO

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My company has been working on setting up deals with investor money for about a year. We have successfully raised about $4M in this time. A lot of effort has gone into finding money which I will recap shortly.

Money for deals is not as easy to come by now as it was a couple of years ago. I would suspect that the appetite for real estate in general has affected this which is tied to the overall ability to get funding. Some of the primary sources for investment have dried up for the time being. While this will mean that the ability to find better deals is on the rise, the underwriting standards will make them harder to take down. This means that there will likely be less leverage.

The sources that we have gone to are as follows:

Friends and family
This is basically your own network of people that you know that trust your ability to do these deals.

Equity Partners
These are typically sophisticated investors, groups, or fund managers that specialize in real estate deals. They like to find local operators that have a track record of success. They usually operate within a defined box of criteria that you would need to fit into. They like their investors to put funds into the deal so that there is "skin" in the game. Most of these types of investment groups already have plenty of deals and "managers" that they are working with. It is difficult to break into their world. Because of the effort that goes into the evaluation of these deals, they like to see projects that are greater than $15M. I have seem some that go smaller but the pool of managers goes up exponentially from there.

Broker/Dealer Network
These are people that place money for accredited investors. They have a pool of opportinities to draw from. Getting their ear is difficult due to the amount of investments and investors that they are working with. You will need to spend a lot of time if you choose this route. First the company will need to qualify you and your project (3rd party due diligence) which you will pay for. Then you will need to spend countless hours selling the sales agents on the merits of the deal. Again, you need to have something that stands out as the agents have plenty of deals to look at.

You will need to hire an attorney of study and fully understand the securities regulations. All of these types of deals have strict guidelines for what you can and can't do. I'm not trying to scare you, just make sure that you are aware. As my attorney once said "There are a lot of felons out there that don't even know it". It is never an issue until there is a problem on a deal.
 
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tawn31

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Sep 16, 2008
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Dont quote me on this but from what I understand there is a way to get the funds you are looking for. I have been told that you can actually purchase a SHELF CORPORATION. The way I understand it is that a Shelf or Aged Corporations are used for convenience, to assume a corporate history and to develop a perceived stability of the business operation. Therefore, as long as the corporation is clean of liabilities, it really does not matter where the aged shelf corporation was initially filed. It can always be continued in another state.

Banks will not lend to corporations unless they have been established for at least 6months. The government still pays the taxes on the corp until you buy. So if you do buy the corp and if it has been established for over 6mnths lenders will lend to you.

I hope I said that right.
 

reipro

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Sep 27, 2007
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Lincoln, NE
Corrado79,

We have been in hundreds of deals and I have never seen a deal sell itself. You have to push it and be passionate about it. If the deal is really that great the money will follow, but you will need to work it and work very hard at it. We are very fortunite, that we have a track record and can go to many investors, but the deal does not sell itself, our track record sells it self. Until you have a track record make sure the deal is great and leave no stone unturned. I hope this helps!
 
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Charmed Angel

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Sep 27, 2007
111
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Tucson & Pittsburgh
Hi everyone. Once again, I come to this wise group for guidance. For those who don't know me, I've recently begun the RE investing game a little over a year ago and now have a few condos and duplexes under my belt.

I am now looking to make the (relatively) big switch to commercial development. I recently got a 50-unit apartment complex under contract (new construction). It is a fantastic deal for a variety of reasons, and should sell itself, but I need to find additional capital investors to get it done. I have about 30-60 days to round up about $500,000 in funds. The question for this forum is: Where do I find these investors?

I have gone through the typically avenues (friends, family, business colleagues, etc.) and have got some funds so far, but I need much more. For those with experience in lining up investors in commercial property, where would you suggest I look next?

Thanks in advance!! :thumbsup:

Any progress on this? We would love to hear what you did and what you learned since this was your first commercial deal!


BTW Steve Rep ++ great stuff!
 

danielhenry31

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Jul 8, 2010
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Money for deals is not as easy to find today than it was several years ago. I think the appetite for real estate in general has influenced what is related to the overall ability to find financing. Some of the main sources of investment have dried up over time.
 
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jrmartin

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Aug 4, 2010
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Just a suggestion, but it worked well enough for me for the past few years to to fund most of the deals I have done since then: go to local real estate auctions and see who is buying. I for instance started buying at the local courthouse foreclosure auctions and got to intoduce myself to some of the bigger players down there. These guys have tons of money backing them and are ALWAYS looking for good deals. Make sure you meet and talk to a couple of them before you talk deals and find someone who your comfortable with and then just tell them you have a property you would like to talk with them about. Where I am in Florida at least, I have bought properties for over
$500K and had to pay for them cash the same day, so the people down there have no problem pulling the trigger on these amounts. Just my 2c, but they love other deals that are brought to them that they dont have to compete with the other 50 people in the room for. Good luck and let me know how it goes.
 
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