Are there private equity syndicators, brokers that help raise money for a fee?

Question

Hello,

Our company is starting to outpace our Friends and Family circles and now that we want to get into the larger properties and need knew streams of equity. Most of the Private Equity shops we talk to say our projects are too small for them as they all seem to have a minimum of 5 million they look to invest per deal.

Right now the projects we are targeting are only in the need for about 1-3 million dollars in private equity.

My question for you is: Are there brokers syndicators that will help you find these equity investors for a fee? I know when we were looking into historic tax credits we found a few people that specialized in just this, helping corporations find tax credit incentives.

I know that crowdfunding is picking up steam and I love their models, but want to know if there are other ways to find equity for your projects.

Juan Maldonado · Answer

@Jay Hinrichs - You hit the nail right on the head, in the end we did exactly just that and brought someone on board who helped us bring in the rest of the money we needed in exchange to a share of being a General Partner. We have a track record established, just don't (I guess didn't) have any experience raising equity.

Kenneth Hartog · Answer

Is there a website where one can post what they are seeking from a lender and it is shopped around?

Bryan Hancock · Answer

We do small subdivisions, but not really any apartment complexes, etc.  I have repositioned product like that in the past, but we haven't built anything new yet.  The play in town right now is for end user housing and that is what we're laser focused on.

Juan Maldonado · Answer

@Bryan Hancock - We were talking to Fundrise and Realtyshares. I just tried to send you a PM but for some reason it didn't let me.

Yeah its amazing whats going on in Austin right now. Few deals make sense in that market place. Its a bit difficult being so far away, hopefully we we make the move and are there things will speed up for us.

Do you do any multifamily stuff? I think seeing your posts and such appears to you SFR new development, correct?

Bryan Hancock · Answer

You and 110 people/day Juan.  Which sites are you working with on your raise?  I have spoken to most of them and can probably give you some pointers about others to chat with.

Juan Maldonado · Answer

@Bryan Hancock Thanks for your reply, we actually were trying to work with two crowdfunding sites and were going to post the deal on at least one. We ended up funding the deal the way that Jay mentioned above and didn't pursue further. I like crowdfunding and hopes it becomes more common in the future.

After reading their terms and legal docs, seems that crowdfunding sites are incredibly restrictive and protective also. Don't blame them however as they are looking out for their investors in a new business class.

I will actually be relocating down to Austin, apparently like much of the world soon, hopefully we will have a chance to meet up sometime.

Bryan Hancock · Answer

The crowdfunding platforms are probably your best bet for projects your size.  Broker-dealers will want to try to design out too much risk and the underwriting fees will be too high for deals your size.

Andrew Syrios · Answer

Spending some more time pounding the pavement and finding people who want to get in on such deals is probably the best way to go.

Juan Maldonado · Answer

@Jay Hinrichs

The multifamily projects we are sourcing right now are located in San Antonio and Austin. We are still going to keep working in Pittsburgh, but our principal and myself are relocating to Texas. Better market and more growth than the Mid Atlantic, short and long term. I will be sending you an email shortly.

Thanks,

Jay Hinrichs · Answer

@Juan  Maldonado

sure thing at least I can give you another opinion.  I fund many different types of investors all over the country... mainly in the single family fix and flip

I am active in the South and south east.. Have never done anything in your area.. have done a lot in MI and IL and IN  and some in OH.