A person reached out to me on facebook from one of my real estate groups (subto) when I mentioned looking for money. Made me wonder if it's a good strategy to seek out fundraisers for my projects. Has anyone worked with such individuals? How much do they charge?
Someone will say hard money lenders do just that. I agree but the hope is fundraisers can get me even better terms.
If not I may just learn the skill of fundraising myself.
It's definitely possible. In high finance it's called "Equity placement" or "investment sales". I believe those people charge a 1-3% fee but I'm not certain. There's also "debt placement" where brokers will shop around for the best mortgage on your behalf and charge a .50-1% fee for that service.
Some even employ in house "investor relations" people, whose sole job is to raise capital.
It's definitely possible. In high finance it's called "Equity placement" or "investment sales". I believe those people charge a 1-3% fee but I'm not certain. There's also "debt placement" where brokers will shop around for the best mortgage on your behalf and charge a .50-1% fee for that service.
Some even employ in house "investor relations" people, whose sole job is to raise capital.
Yep, in the syndication world it is very common. For example, On the deals that my company runs if we don't think we can raise enough on our own I will call up one of my friends who their sole job is to raise capital. They then go out and find whatever else I need and get some equity in the deal depending on how much they raised. After that they are essentially done and just hold onto that equity sliver they have. These people IMO are incredibly valuable because they have the relationships for raising capital and takes the pressure off me if I cant come up with enough.
@Sam Tright Hi Sam, yes there are companies that exclusively solicit capital for deals in most cases they will want control of the asset, in return offering you a piece of equity.