Hi fellow BP members,
I am just curious to see which of the below strategies you would find most attractive if offered to you, for raising capital.
- Offering a competitive interest rate on loaned capital
- Having investor own the property, but split cash flows 50/50
- Allowing myself (sole LLC manager; where property would be held ) to receive a quarterly % of AUM (Assets under management)
Any input on alternate strategies would be greatly appreciated!
@Samuel S. , any of the strategies you list can be attractive if attached to the right kind of property. The strategies that appeal to different capital partners will depend upon what stage the investor is in, their goals, the type of property, and the risk/reward. Some investors will be attracted to a high yield but if that yield comes with a large personal liability for the underlying mortgage, an ownership share of a property in a poor area, or one that has a lot of deferred maintenance (all situations that may leave the investor vulnerable to a capital call) the yield will not be as attractive. Many investors will accept lower yields for a share of a well maintained property, in appreciating areas, or if they can participate as limited partners and risk only their initial investment.
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