How to get $30MM assets under management?

4 Replies

I came across a real estate crowdfunding platform called CrowdStreet.  I was mainly interested in checking out what investment firms raise funds on that platform and what it takes to "sponsor" a fund on there in an effort to seek out investors.

I talked to one of their reps and they look for companies with at least $30mm under management. 

What is a good way to start out to raise investor funds to reach that stage?

Most of the sponsors (I can't say "all" because I haven't looked at every deal) typically use Crowdstreet to enhance the base of investors that they already have.  In other words, they have already built a successful track record of investments with outside capital and decide to use Crowdstreet to find other investors to join.  This isn't a platform for newbies.

If you are seeking to build $30MM of AUM, I'd follow the advice of others on this board on best ways to start out building your portfolio.

Thanks. The question is how to start getting outside capital.


Originally posted by @Jim Groves :

Most of the sponsors (I can't say "all" because I haven't looked at every deal) typically use Crowdstreet to enhance the base of investors that they already have.  In other words, they have already built a successful track record of investments with outside capital and decide to use Crowdstreet to find other investors to join.  This isn't a platform for newbies.

If you are seeking to build $30MM of AUM, I'd follow the advice of others on this board on best ways to start out building your portfolio.

@Adrian Chu , you may already be aware of this but the typical path I see is ... do a few deals in your local REIA or people with whom you have a prior relationship.

Get a commercial loan if needed.

Next, look into other platforms like Realtyshares, patch-of-land, etc.

Next, look into syndications. Participate in one.

Next, follow SEC regulation 506 to form your own syndication.

These are the steps at a 100,000 ft view.

Listen to podcasts from Michael Blank, Rod Khlief, Real Estate Guys, etc.

@Adrian Chu

The model I have seen with people I have invested with is:

1) Show a track record of consistent project with good returns. People invest in you and the deal and both are needed (at least I think they are).  

2) Build relationships. The longer people know you, work with you and generally are comfortable with you before you pitch them a deal the better. 

3) Go slow - It sucks to pass up deals and money but if you get in over your head your investors suffer and investors talk. Further, if you did a SEC deal it is a substantial risk if one of those investors complaints. Make sure you are ready to really be a good guardian of capital. 

4) Take care of your investors - Rule number 1 never lose principal, rule number 2 keep your eye on rule number 1. Do the right thing by your investors even if it means coming out of pocket. It goes a mile later on. 

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