How to raise capital on a big scale

4 Replies

How do real estate developers raise private capital on a bigger scale for those $50M-$100M+ projects that need like $30% in private capital?

Not sure I completely understand the question...

In general, they will:

1.  Set up a private placement by filing the necessary SEC forms

2.  Convince investors to invest into the private placement

Are you looking for more information about #1 or #2?

I have never done one that big however equity is usually private from some source.

crowdfunders stepped into the equity space

@J Scott Thanks for your response!

Basically what I mean is how do real estate developers (let's say condo developers) raise those high amounts of money for their projects? Other than debt, securing a big loan, where do they get the other 15%-35% of the money? Other than investor by investor, when we are talking about $20M+ in private capital, it's probably from bigger chunks 

Originally posted by @Arturo Borges :

@J Scott Thanks for your response!

Basically what I mean is how do real estate developers (let's say condo developers) raise those high amounts of money for their projects? Other than debt, securing a big loan, where do they get the other 15%-35% of the money? Other than investor by investor, when we are talking about $20M+ in private capital, it's probably from bigger chunks 

In my experience, it's typically from individual investors.  Now, it may be some large investors putting in a lot of capital ($1M+) or it could be a lot of smaller investors putting in $50-500K each.  But, typically, it's a pooling of multiple investors.  

If you have the relationships and experience, you may be able to find money from a private equity firm or a hedge fund, but typically they are your competitors, not your lenders.  

There are also conventional lenders that can provide these types of funds, but you'll need a healthy balance sheet on your own to qualify (or a lead investor you are partnering with).

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