How to find Investors to raise Millions?

Question

Just a little background for me: I own 3 Duplex & 5 SFH (acquired for $700K in total) with my partner in just less than 2 years and generating high cash flow of $6K every month from all of my rental properties. All thanks to the perfect timing and perfect team that I got! Without them, I wouldn't be as successful as I am today :)

Now we're thinking to expand our business, but the problem is to find the commercial loan. I don't think we can get approved for $3-5 Million loan with 5% rate. The properties that we have right now are all under our personal names, not company name/LLC (although we formed LLC with my partner). We've only been given to have 16 properties in total (with my partner), so right now we're halfway to max out).

My question is how to find investors to raise Millions $$$? Should I fly to Dubai/UAE or Asian countries to attend Investors Conference? To my surprise, my friend has recently been approved for his $232 Million loan with 3% rate ($2.5 Million monthly payment)! I don't know how he did it, but I am super happy for him, now I feel so poor....haha. I just need to have $3-5 Million loan with 5% rate, not Hundred Million Dollars loan...do you think it's possible?

What's exactly syndicated loan as some ppl talked about? Is it the same as Private Equity Waterfall?

Really appreciate your advise, BP Folks!

Nathan Gesner · Answer

Go to the BiggerPockets bookstore and buy "Raising Private Capital" by Matt Faircloth or look for "The Best Ever Apartment Syndication Book" by Joe Fairless. They both have podcasts you can watch and I believe Joe provides coaching if you really want to take the leap. He has a great reputation.

Nathan Gesner · Answer

I've thought the same thing. He apparently doesn't feel the need to out effort into it. He's on a ton of podcasts, videos, and blogs. Be speaks at a lot of investor conferences,so I know he's legit.

if you ever meet him, you will also see he doesn't dress up. Some people try to look fancier than they are. I think Matt tries to keep it real and impress people with his performance

Joseph Cacciapaglia · Answer

You might want to look into refinancing your portfolio first. Arbor recently came out with a product for exactly the type of portfolio you described, although you may not meet their minimum loan amount yet, unless you've added a lot of value to that total acquisition cost you mentioned.

I definitely don't think you need to fly around the world to find investors. They exist in every major city, so I would focus locally first. Just get out there and network.

Roni E. · Answer

@Caroline Widjaja if you are trying to do large deals stabilized deals more than likely you will be at 70% Loan to Cost, could be more but that is a safe amount. CBRE, Berkadia, JLL all have a debt side that they can help you with and give guidance on. Next, I would speak with a securities attorney as it seems you will be raising money, you can DM me for some connections. Good luck.

Lee Ripma · Answer

@Caroline Widjaja

I second the advice on reading up on capital raising and syndication. Why do you need a 3-5M loan at 5% interest? The interest rate on that loan is likely more like 3.5-4% if you’re buying stabilized assets. What’s your goal? To buy bigger deals? To syndicate? To just buy something larger for yourself? Start by defining your goal and then educating yourself. This will prevent premature trips to the UAE!

Shayla Wilson · Answer

Sorry. Looks like there was a glitch in the app, and I can view the responses now. Lol. Carry on!

Shayla Wilson · Answer

@Caroline Widjaja

Wow. I’m surprised no responses yet on this potent topic. I’m not ready for this stage yet, but I’m certainly interested in hearing responses.

Tze Lee · Answer

@Allan C. Thanks for the tip, I haven't heard of that before and will explore.

Allan C. · Answer

@Tze Lee talk to banks and secure a portfolio loan.

Karen Margrave · Answer

@Caroline Widjaja the obvious answer is talk to your friend. If he's capable of raising that kind of capital, what you need is easy. He can tell you what steps to take, etc. He may even have people that do smaller loans. People that know you are the easiest to get help from. Good luck.

How to find Investors to raise Millions?

How to find Investors to raise Millions?

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