How do people raise capital to purchase multifamily?
Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes
How do people raise capital to purchase multifamily?
Most Popular Reply
Arn CenedellaPro Member
Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votesMy advice is to work in both simultaneously.
How much capital can you raise?
Truth is until you try you won’t know.
If you don’t know how much capital you can raise, how do you know what purchase price you can pay? Answer is you can’t.
If you don’t know your maximum price, how do you know what type of property to look for?
No sense looking for a $5M which will require $1.5M to $2M in cash if you can’t raise that amount.
Good rule of thumb:
Actual capital raised will be one half of what you expect to raise.
Best bet for first time capital raisers is friends and family your social and professional spheres.
The other question is:
What experience do you have in commerical real estate? Investors will only invest with sponsors who have greater knowledge and experience than they do. If they know as much as you do, why would they invest with you?
Not being critical just trying to level set your expectations here. Far too many new investors have believed the “go big or go home” gurus and lost their shirt.
Start small - get some small wins - build your resume - have success and then based on that track record start to scale.
Start talking to your close circle:
Hey Joe I’m starting to look for a small MF property to buy. Would you be interested to take a look if I find something good?
Do this with 50 to 100 people.
Maybe 25 express interest. 5 may end up investing.
My advice is look for something where you can find 1/2 the deal yourself. You need to be in a position to “back stop” the capital if your raise falls short (which it probably will).
So $1M property you will need $300K $400K to buy. If you have $150K to $200K on your own you only need to raise 150 to 200. That’s maybe 4 investors.
One must also gauge where there sphere is financially. Is the average person in your network making $100K $200K $500K a year? It matters.
Set a realistic target goal start looking start talking to people no pressure just share what you are doing those interested will self identify
Hope this helps
arn
15 Replies
- Lender · Marlboro, NJ · Member since 2025 · 243 posts · 149 votes1y
I’ve seen a lot of investors go both routes, having capital lined up first or locking up the deal and scrambling to raise funds. Either way, using OPM successfully usually comes down to:
Finding a deal with clear upside (value-add, underpriced, or unleveraged equity)
Structuring creatively — like combining private capital, HELOCs, or partners with smart financing
Having the right lender who can move fast and work with your structure — not against it
We help new and experienced investors fund 1–4 unit multifamily deals using:
DSCR or no-doc loans so your personal income isn’t a barrier
Delayed purchase financing (so you can close cash, then refi in 30 days to pull your funds back)
Bridge + rehab funding for value-add plays
If you find a deal first, we can often help you position it to raise capital confidently by showing the leverage options and return profile early.
- 1yArn CenedellaPro MemberRental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
My advice is to work in both simultaneously.
How much capital can you raise?
Truth is until you try you won’t know.
If you don’t know how much capital you can raise, how do you know what purchase price you can pay? Answer is you can’t.
If you don’t know your maximum price, how do you know what type of property to look for?
No sense looking for a $5M which will require $1.5M to $2M in cash if you can’t raise that amount.
Good rule of thumb:
Actual capital raised will be one half of what you expect to raise.
Best bet for first time capital raisers is friends and family your social and professional spheres.The other question is:
What experience do you have in commerical real estate? Investors will only invest with sponsors who have greater knowledge and experience than they do. If they know as much as you do, why would they invest with you?
Not being critical just trying to level set your expectations here. Far too many new investors have believed the “go big or go home” gurus and lost their shirt.
Start small - get some small wins - build your resume - have success and then based on that track record start to scale.
Start talking to your close circle:
Hey Joe I’m starting to look for a small MF property to buy. Would you be interested to take a look if I find something good?
Do this with 50 to 100 people.
Maybe 25 express interest. 5 may end up investing.
My advice is look for something where you can find 1/2 the deal yourself. You need to be in a position to “back stop” the capital if your raise falls short (which it probably will).
So $1M property you will need $300K $400K to buy. If you have $150K to $200K on your own you only need to raise 150 to 200. That’s maybe 4 investors.
One must also gauge where there sphere is financially. Is the average person in your network making $100K $200K $500K a year? It matters.
Set a realistic target goal start looking start talking to people no pressure just share what you are doing those interested will self identifyHope this helps
arn - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Austin Fowler:
Looking to learn more from people that have bought at least one multifamily property using OPM. Would love to hear the details. How did you get started? Did you have the capital ready first and then find the deal? If you found the deal first, how long did you have to raise the capital?
Multifamily falls into a few categories.
1 - 4 units - treat it like buying a single family. You run the business.
5 - 60 Units You go the commercial route. It helps to know a few people who have money to invest and join you in your project.
60 - 5,000 Units Typically you have full time people on staff managing things. You usually go the syndication route. You hire an attorney to put together your "offering" ($10,000 to $15,000 ) and try to get people to give you money for your purchase.
The biggest issue right now, from what I've heard, is finding deals that actually throw off profit.
Soliciting small amounts from a lot of people probably requires a syndication or you run afoul of SEC laws.
- 1yGina RobertsonPro MemberReal Estate Agent · Cape Coral, FL · Member since 2024 · 4 posts · 4 votes
Great question, @Austin Fowler, I am looking for insight on this as well, so tagging along for the discussion!
- 1ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Quote from @Austin Fowler:
Looking to learn more from people that have bought at least one multifamily property using OPM. Would love to hear the details. How did you get started? Did you have the capital ready first and then find the deal? If you found the deal first, how long did you have to raise the capital?
First step is having a proven concept, so having properties yourself and showing your success. At least that is what I would look for when doing that
Sam McCormack Realtor - Rental Property Investor · Philadelphia, PA · Member since 2021 · 774 posts · 500 votes1y
@Austin Fowler - You've already received some great advice from other posts, but I'll add that there are some good books on the topic, including Hunter Thompson's book on "Raising Capital For Real Estate" and Matt Faircloth "Raising Private Capital For Real Estate" - both are well worth the read! Good Luck!
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes1y
I suspect most people who have raised money for deals have had significant experience before they got to that level. Keep in mind that many deals where new syndicators raised money are crashing and burning.
- Appraiser · Memphis, TN · Member since 2016 · 2 posts · 1 vote1y
Quote from @Austin Fowler:
Thanks everyone for sharing your approaches. In my own case, I always raise capital ahead of time and my focus is on acquiring LP stakes when investing in multifamily. I’ve never been the GP. Passive investing is my thing. I’ve built an $8M stake in over 2200 doors of multifamily by raising money at 8%, and targeting a 20% return when deploying. I raise capital at 8% by providing liquidity to my investors and a personal guarantee. Plus education. I start people off with an account that is fully liquid, no fees, interest credited daily, and then I show how to do due diligence on operators and deals and invest ethically and profitably. In essence, my business is an ecosystem where capital that needs to be kept liquid can get an 8% return and professional investors can raise capital at 8% and educate people how they make returns in excess of this. I've been doing this over 22 years, through the GFC and Covid, never lost a cent of investor capital.
I currently manage $18M of client capital raised in this manner, backed by a $30M+ portfolio, and I think the ecosystem is just getting started. My portfolio spans cash, stocks, renewable energy, single-family, multifamily, and flips.
I'd love to learn more about your platform. Both as a LP and as an operator of assets.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Probably best if you ask a long list of questions, as when I try to write a long post explaining things the moderator is not permitting me to post.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes1y
Quote from @Austin Fowler:
Looking to learn more from people that have bought at least one multifamily property using OPM. Would love to hear the details. How did you get started? Did you have the capital ready first and then find the deal? If you found the deal first, how long did you have to raise the capital?
Austin, can you explain what this actually means in your bio?
We teach people how to raise capital for real estate by offering fully liquid loan accounts that pay 8%. This enables you to achieve both 100% ownership of the asset and 100% finance. We can see examples of assets bought using such finance on our website. We are looking for more people to mentor.- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Marcus Auerbach:
Quote from @Austin Fowler:
Looking to learn more from people that have bought at least one multifamily property using OPM. Would love to hear the details. How did you get started? Did you have the capital ready first and then find the deal? If you found the deal first, how long did you have to raise the capital?
Austin, can you explain what this actually means in your bio?
We teach people how to raise capital for real estate by offering fully liquid loan accounts that pay 8%. This enables you to achieve both 100% ownership of the asset and 100% finance. We can see examples of assets bought using such finance on our website. We are looking for more people to mentor.Sure, if the moderator will let me explain. I have 100 clients that deposit money with me. I run a lightweight version of a bank. My clients experience a savings account that pays 8% per annum, no fees, fully liquid, I experience a debt obligation that grows at 8% per annum, interest capitalizing, term forever. I keep a cash fraction reserve, and liquid assets equal to approximately 50% of managed funds. The vast majority of the profit of the business is generated with illiquid assets that have significantly higher returns than 8%. We provide all the necessary infrastructure for others to do the same thing.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.