How to raise accredited investor money?

Question

Hi everyone,

I am wondering how to market a (~$10m equity) syndicated fund the correct way to gain attention. It's kinda frustrating that the size of the deal is too small for institutional investors but too large for retail investors (non-accredited investors).

Disclaimer: not a fund advertisement, i am seeking friendly advise only.

Omar Khan · Answer

This is the best comment I have read this month on BP! Thank you for pointing out the obvious.

Wish there was a button to double like your comment.

Brie Schmidt · Answer

At the top right of the page is a search bar. There are over 2k articles on the topic

Amy Wan · Answer

I just want to point out that there has been significant abuse of syndication "partnerships" over the last few years, and many are not doing it the way it should be done. So, while partnering is fine, partnering for the sole purpose of having others raise capital for you for compensation is not.

Alina Trigub · Answer

@Lincoln Wu

It all comes down to having a track record to show to your potential investors. If you don't have one, then your best bet is to partner with an experienced operator to leverage their experience. Think of it from an investor perspective: why would you want to give your money to someone without or with a little experience?!

Here's an article that will give you a few more tips on finding investors:

https://www.biggerpockets.com/member-blogs/10850/84894-where-can-i-find-investors

Kim Lisa Taylor · Answer

@Alina Trigub is right - your best option is to syndicate the amount you can handle and joint venture with another syndicate and/or private equity fund for the remainder. Your joint venture partner (and Lender) will be looking for your syndicate to have an experienced operator, so make sure you have someone on your team with significant syndication experience in the same asset class.

Jack Martin · Answer

@Lincoln Wu great advice already here in this thread. A common path to building a track record is to syndicate individual projects, one at time. After you have done a handful of successful projects, it can become much easier to raise capital in a fund.

Consider the perspective of your potential investor as they consider an investment in your fund. Regardless of whether they are an individual investor or a larger capital group, you should be able to demonstrate your abilities as a good steward of capital. Without gaining a certain level of confidence, it will be tough for potential investors to get comfortable enough to invest.

As mentioned above, some syndicators bring on a partner with the experience and track record, but I have always believed in the idea that the person raising the capital should also have the experience necessary to answer questions from prospective investors. After all, an investment in your fund is ultimately an investment in you as the sponsor.

In my experience, there is a tremendous amount of confidence built with my investors when they know they can ask me a question about the properties, the performance, or any matter related to the structure of the investment and I can answer it.

All the best,

Jack

John Fortes · Answer

What @Amy Wan states has been the center of many topics these last few months and it's only gaining more attention. Be mindful and know the rules. Thank you for stating this Amy! I appreciate you!

Theo Hicks · Answer

@Lincoln Wu partner with experienced real estate company that has a proven track record(add value or help to solve their problems) and start building quality relationships with accredited investors. You can grab a “Best Ever Apartment Syndication Book” to start learning strategies how to build those relationships.

Matt Engle · Answer

@Lincoln Wu start with identifying the type of syndication you want to offer. A 506(b) offering will have different requirements than a 506(c) offering. Your best bet is to reach out to your immediate network first.

Tj Hines · Answer

@Lincoln Wu, to ensure you are doing things the right way, which is the only way - you need to consult with a credible SEC attorney. One most well known in the syndication space is @Mauricio Rauld. Not to mention one of the most genuine guys I know. Do your research. Good luck.

How to raise accredited investor money?

How to raise accredited investor money?

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