FUNDING REAL ESTATE PROJECTS

[Karen Margrave]

There’s nothing more critical to investing than finding money/funding, etc., and I know that I, and many other BP members would like to learn from those with different experiences. As a developer, there’s always more deals than money. Waiting to roll money from one deal to another, in a rising market, where available land is rare, means losing lucrative deals. Knowing that sharing profits with others, and getting a piece of the pie over no pie, is sometimes necessary.

If you were a developer wanting to fund projects (from purchasing land through construction and final sale) with as little up front cash as possible, what strategy would you use and why? (Joint Venture, Syndications, Trade completed units, etc.) Projects would be SFR, Multi-Use (live/work condos), medical office condos, Pocket subdivision, land development, etc.

@Douglas Dowell

@Bryan Hancock

@Brian Burke

@Dave Van Horn

@Ellis San Jose

[Douglas Dowell]

@Karen Margrave I am humbled to share my learning on this topic. Its my opinion your well suited to really scale up using the private money machine.

The oldest business model in the world is money seeks talent. Your track record will permit you to really crush it if you add on a private money machine component.

First, I would say the "form" of the structure really is not the key. We could say a joint venture, tenant in common, LLC, c-corp could all be a security. I think the private money 201 post I am finishing up for tomorrow will be VERY helpful for what you are working on.

To me, it seems the joint venture model will be more common if your working with one or two institutional investors. Where if you raise the deal locally likely working with accredited investors and sophisticated it will be more the traditional syndication model. Really semantics overall.

The key is seeking out a regional broker dealer to raise the money for you might just hyper accelerate your business. I think your in a position to offer something they can sell. The only catch is the upfront diligence/legal fee's.

Someone with little experience would probably not get far. In your case however, I think you could really do well with their assistance.