Hey everyone! I am working on a deal right now that is a 72 unit new construction with surrounding land that could be purchased down the road to add another 125 units. In total the current 506B real estate fund is a $2M dollar fund. Im proud to say that the fund is 40% raised - but I have a long way to go and its proiving to be quite the challenge! The fund is going towards acquisition costs and principal.
a little bit of info on the fund....
2.5 equity multiple
5-7 year fund
Minimum $10k investment
1% acq, 1% mgmt, 1% disposition fee
Anybody out there have any contacts or know anyone that could help with the capital raising?
Anybody out there have any experience successfully managing a crowdfund type acquisition? Any recommendations or best practices?
If it's a 506(b) you probably shouldn't discuss it on BiggerPockets until it's closed. There's a good definition of general solicitation on this page from Syndication Attorneys LLC.
@Mauricio Rauld has put out a lot of great content on his YouTube page about getting compensated for raising money and compensating others for raising money. I'd highly suggest you check that out as well.
@Taylor L. thanks for the input! Certainly not my intention to solicit. More or less looking for others who have had success on similar deals. Providing specifics of the fund allows other pros to analyze and provide feedback - but reflecting back on the post I can certainly see where there might be call for concern in terms of solicitation.
Being that its our first go - theres a lot to learn! Really just looking to network with those more experienced than I so that I can learn, grow, and get this done as efficiently as possible :)
Thanks for the references on content to review!
A few points to consider:
1) Since you're newer to BP, you may not be aware, that your type of post sounds like advertisement and BP asks to post under the Marketplace.
2) I'd advise to consult with your securities attorney prior to posting anything on social media, particularly about 506b's.
3) You may want to consider hiring a broker to help you raise the funds.
4) Another alternative to nu 3 above is to co-GP with someone who can cover this side of the business for you: cap raising, investor relations, asset management, perhaps other things, while you concentrate on the construction itself.
5) A few more thoughts on finding the investors...