real estate syndication 1 million + raise
Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Section 8 Launch52 Reviews
real estate syndication 1 million + raise
Most Popular Reply
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1yQuote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.
Would love to hear from anyone who has successfully raised capital on these or other platforms!"
We did not use any of those sites or crowdfunding sites. My opinion is the fees you pay do not make sense. We had a broker dealer arrangement and used their invest direct button since we had a regulation a+ offering. If you do crowdfunding (Reg CF) you cannot host yourself.
If you are doing a Reg D then I would use appfolio investment management or junipersquare or something like that (There are many of them and many on BP who provide them, I just named those two as we use appfolio and JS is well known)
Your best raise is coming from you and meeting investors, no one raises money better than the sponsor.
7e investments53 Reviews
17 Replies
- 1yGreg ScottPro MemberRental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
You are choosing between control and marketing.
If you spend the time to properly market yourself, you may be able to raise the money, assuming you do it well. If you abdicate the marketing to one of these platforms, you may be able to raise the money but have much less control over who invests.
You may say "Who cares? I just need the cash.", but a rogue investor can suck up a lot of time. I've seen some of my friends waste countless hours trying to answer the unending questions of a lunatic passive investor.
- Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes1y
Quote from @Greg Scott:
You are choosing between control and marketing.
If you spend the time to properly market yourself, you may be able to raise the money, assuming you do it well. If you abdicate the marketing to one of these platforms, you may be able to raise the money but have much less control over who invests.
You may say "Who cares? I just need the cash.", but a rogue investor can suck up a lot of time. I've seen some of my friends waste countless hours trying to answer the unending questions of a lunatic passive investor.
have you used any of these platforms? I appreciate the advice. we looked nationally for about 2 months for this particular deal it's a 58 room apartment hotel deal and a bit small for private equity and hotel funds they want double the size so we are pushing forward with the fund creation and equity raise.
Section 8 Launch52 Reviews
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
We did not use any of those sites or crowdfunding sites. My opinion is the fees you pay do not make sense. We had a broker dealer arrangement and used their invest direct button since we had a regulation a+ offering. If you do crowdfunding (Reg CF) you cannot host yourself.
If you are doing a Reg D then I would use appfolio investment management or junipersquare or something like that (There are many of them and many on BP who provide them, I just named those two as we use appfolio and JS is well known)
Your best raise is coming from you and meeting investors, no one raises money better than the sponsor.
7e investments53 Reviews- Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes1y
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
We did not use any of those sites or crowdfunding sites. My opinion is the fees you pay do not make sense. We had a broker dealer arrangement and used their invest direct button since we had a regulation a+ offering. If you do crowdfunding (Reg CF) you cannot host yourself.
If you are doing a Reg D then I would use appfolio investment management or junipersquare or something like that (There are many of them and many on BP who provide them, I just named those two as we use appfolio and JS is well known)
Your best raise is coming from you and meeting investors, no one raises money better than the sponsor.
Chris, any suggestions on who to setup the SPV and all regulatory and general cost?
Section 8 Launch52 Reviews - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Robert Ellis:
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
We did not use any of those sites or crowdfunding sites. My opinion is the fees you pay do not make sense. We had a broker dealer arrangement and used their invest direct button since we had a regulation a+ offering. If you do crowdfunding (Reg CF) you cannot host yourself.
If you are doing a Reg D then I would use appfolio investment management or junipersquare or something like that (There are many of them and many on BP who provide them, I just named those two as we use appfolio and JS is well known)
Your best raise is coming from you and meeting investors, no one raises money better than the sponsor.
Chris, any suggestions on who to setup the SPV and all regulatory and general cost?
$10k for an attorney to setup a 506c with all the documents. There are people out there who will lend on entitlements but that is typically if there is some horizontal work going on or if there is a LOI or some purchaser on the back end to buy it based on meeting some stipulations. THat we have seen (but you pay a hefty price to borrow for that type of thing) which is basically borrowing at credit card rates so you need to have a locked in buyer on the back end.
Other option is an equity partner as you mention but lets say its worth $750k (not sure value) - maybe get someone to put in 25-50% max. but they will want a considerable portion of the upside and want to see a definitive exit strategy.
7e investments53 Reviews - Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes1y
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
We did not use any of those sites or crowdfunding sites. My opinion is the fees you pay do not make sense. We had a broker dealer arrangement and used their invest direct button since we had a regulation a+ offering. If you do crowdfunding (Reg CF) you cannot host yourself.
If you are doing a Reg D then I would use appfolio investment management or junipersquare or something like that (There are many of them and many on BP who provide them, I just named those two as we use appfolio and JS is well known)
Your best raise is coming from you and meeting investors, no one raises money better than the sponsor.
Chris, any suggestions on who to setup the SPV and all regulatory and general cost?
$10k for an attorney to setup a 506c with all the documents. There are people out there who will lend on entitlements but that is typically if there is some horizontal work going on or if there is a LOI or some purchaser on the back end to buy it based on meeting some stipulations. THat we have seen (but you pay a hefty price to borrow for that type of thing) which is basically borrowing at credit card rates so you need to have a locked in buyer on the back end.
Other option is an equity partner as you mention but lets say its worth $750k (not sure value) - maybe get someone to put in 25-50% max. but they will want a considerable portion of the upside and want to see a definitive exit strategy.
Chris, great inputs. The people I've seen do this at scale is called Texas triangle fund. they raised 25 million and do this for horizontal developments to national builders. I've looked at the same fund structure for horizontal developments in the south east in Orlando, Jacksonville, Atlanta, Tampa, Raleigh, Charlotte, etc. in my opinion debt is better. since they are getting 3x returns on the average land plot they can be wrong 1/5 times and still make plenty but as a business that's how they set it up. I think for land equity is better since there are a lot of unknowns. the equity comment you mention in my opinion is much better yes with normally at least 30% or more going to them. I think having a good strong team and good track record is essential
Section 8 Launch52 Reviews - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Robert Ellis:
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
We did not use any of those sites or crowdfunding sites. My opinion is the fees you pay do not make sense. We had a broker dealer arrangement and used their invest direct button since we had a regulation a+ offering. If you do crowdfunding (Reg CF) you cannot host yourself.
If you are doing a Reg D then I would use appfolio investment management or junipersquare or something like that (There are many of them and many on BP who provide them, I just named those two as we use appfolio and JS is well known)
Your best raise is coming from you and meeting investors, no one raises money better than the sponsor.
Chris, any suggestions on who to setup the SPV and all regulatory and general cost?
$10k for an attorney to setup a 506c with all the documents. There are people out there who will lend on entitlements but that is typically if there is some horizontal work going on or if there is a LOI or some purchaser on the back end to buy it based on meeting some stipulations. THat we have seen (but you pay a hefty price to borrow for that type of thing) which is basically borrowing at credit card rates so you need to have a locked in buyer on the back end.
Other option is an equity partner as you mention but lets say its worth $750k (not sure value) - maybe get someone to put in 25-50% max. but they will want a considerable portion of the upside and want to see a definitive exit strategy.
Chris, great inputs. The people I've seen do this at scale is called Texas triangle fund. they raised 25 million and do this for horizontal developments to national builders. I've looked at the same fund structure for horizontal developments in the south east in Orlando, Jacksonville, Atlanta, Tampa, Raleigh, Charlotte, etc. in my opinion debt is better. since they are getting 3x returns on the average land plot they can be wrong 1/5 times and still make plenty but as a business that's how they set it up. I think for land equity is better since there are a lot of unknowns. the equity comment you mention in my opinion is much better yes with normally at least 30% or more going to them. I think having a good strong team and good track record is essential
debt is better but in 2008 I saw some of the largest companies in real estate like JPI in early 2000's owned / developed a lot of land and was build ready and ended up going under because of slow down and lack of construction - if you do not sell and economy goes south, sitting on a shovel ready project can get expensive and go the other way quickly.
7e investments53 Reviews - Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes1y
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Quote from @Chris Seveney:
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
We did not use any of those sites or crowdfunding sites. My opinion is the fees you pay do not make sense. We had a broker dealer arrangement and used their invest direct button since we had a regulation a+ offering. If you do crowdfunding (Reg CF) you cannot host yourself.
If you are doing a Reg D then I would use appfolio investment management or junipersquare or something like that (There are many of them and many on BP who provide them, I just named those two as we use appfolio and JS is well known)
Your best raise is coming from you and meeting investors, no one raises money better than the sponsor.
Chris, any suggestions on who to setup the SPV and all regulatory and general cost?
$10k for an attorney to setup a 506c with all the documents. There are people out there who will lend on entitlements but that is typically if there is some horizontal work going on or if there is a LOI or some purchaser on the back end to buy it based on meeting some stipulations. THat we have seen (but you pay a hefty price to borrow for that type of thing) which is basically borrowing at credit card rates so you need to have a locked in buyer on the back end.
Other option is an equity partner as you mention but lets say its worth $750k (not sure value) - maybe get someone to put in 25-50% max. but they will want a considerable portion of the upside and want to see a definitive exit strategy.
Chris, great inputs. The people I've seen do this at scale is called Texas triangle fund. they raised 25 million and do this for horizontal developments to national builders. I've looked at the same fund structure for horizontal developments in the south east in Orlando, Jacksonville, Atlanta, Tampa, Raleigh, Charlotte, etc. in my opinion debt is better. since they are getting 3x returns on the average land plot they can be wrong 1/5 times and still make plenty but as a business that's how they set it up. I think for land equity is better since there are a lot of unknowns. the equity comment you mention in my opinion is much better yes with normally at least 30% or more going to them. I think having a good strong team and good track record is essential
debt is better but in 2008 I saw some of the largest companies in real estate like JPI in early 2000's owned / developed a lot of land and was build ready and ended up going under because of slow down and lack of construction - if you do not sell and economy goes south, sitting on a shovel ready project can get expensive and go the other way quickly.
I think that's why dealing with top national builders and having a pulse on the national construction market is key. florida, Texas, Georgia was 35% of projects available when I was doing national construction in all asset classes. 1/3. that's why I moved to florida.
Section 8 Launch52 Reviews
- 1yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
You are transacting at a difficult deal size...as you alluded to, too small for the customary single check writer yet a painstaking process for most to raise in smaller increments from friends and family. Greg raises a good point about who you are getting involved with. While the capital raising with family and friends can be painstaking, you at least know who you are getting into business with. Can't say the same when using these types of platforms.
What is the plan once the Hotel is built? Do you have a management company who will take over operations or is your plan to sell? Having previously worked in-house at a hotel REIT that both owned and managed hotels, it was quite common for my employer to enter into agreements with developers of the hotel. They would serve as the equity partner during the construction phase and even in some instances provide some credit enhancement and take over ownership upon completion. It would often work out as a win-win for both sides. The end operator would get a discount in return for the equity participation and would create a more efficient transaction at the disposition phase. May be worth looking into.
- Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes1yI reached out to most of these platforms today and most seemed to be closed off to first time fund creators. I agree about the deal size being too small. We do land development so we found this piece of land and entitled it and have a 700k land bump and now we need to recapitalize on the equity side to pay for the 500k of plans, engineering, architecture, etc. I thought best structure was maybe an SPV and put the land value into that and sell development equity and real tangible equity in land to generate cash for soft costs and we would cover that out of pocket.
Quote from @Stuart Udis:
You are transacting at a difficult deal size...as you alluded to, too small for the customary single check writer yet a painstaking process for most to raise in smaller increments from friends and family. Greg raises a good point about who you are getting involved with. While the capital raising with family and friends can be painstaking, you at least know who you are getting into business with. Can't say the same when using these types of platforms.
What is the plan once the Hotel is built? Do you have a management company who will take over operations or is your plan to sell? Having previously worked in-house at a hotel REIT that both owned and managed hotels, it was quite common for my employer to enter into agreements with developers of the hotel. They would serve as the equity partner during the construction phase and even in some instances provide some credit enhancement and take over ownership upon completion. It would often work out as a win-win for both sides. The end operator would get a discount in return for the equity participation and would create a more efficient transaction at the disposition phase. May be worth looking into.
Once the hotel is built it will be managed by an operator. The plan is flexible but holding would be good. We have it approved in an area called Franklinton in Columbus Ohio. we just need to finalize the parking structure. the hotel groups we talked to all said it's too small so that leaves us in a middle area where we have to raise funds the old fashioned way. I'm thinking a 506(c) offering through an SPV I'm just trying to see best way to set that up or contacts to get it priced out. We need to close on the second piece of land for the parking which is maybe $60k by June so I figured to set it up and raise the first 500k-1 million for the development. the SPV could also just be a development SPV with a refinance as an exit. but I think planning on long term ownership is best with passive income. the structure you talk about with hotels is post entitlement it's hard to negotiate up front. so this is a unique opportunity where we own the land and it's meant to be a good start.
I've been looking for a co syndicator or sponsor but it's a little specialized right now that's why I posted about this structure.Section 8 Launch52 Reviews
- 1yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Robert Ellis The additional information you shared changes the capital raise. It is far more difficult to raise the capital from the types of check writers you are pursuing without a fully permitted project. Zoning alone isn't sufficient. Since it appears you created considerable value through the zoning process, can you utilize debt to complete the permitting process? If not, you will likely have to find a capital partner to assist with the completion of the permitting and then seek out the equity source you are currently pursuing once the project is shovel ready. Transaction size is still a challenge, but not having a fully permitted project makes the pursuit of development phase equity that more difficult.
- Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes1y
Quote from @Stuart Udis:
@Robert Ellis The additional information you shared changes the capital raise. It is far more difficult to raise the capital from the types of check writers you are pursuing without a fully permitted project. Zoning alone isn't sufficient. Since it appears you created considerable value through the zoning process, can you utilize debt to complete the permitting process? If not, you will likely have to find a capital partner to assist with the completion of the permitting and then seek out the equity source you are currently pursuing once the project is shovel ready. Transaction size is still a challenge, but not having a fully permitted project makes the pursuit of development phase equity that more difficult.
I think that or setup the SPV and raise equity and sell realizable land equity to low risk "Tier 1" investors who will receive higher returns and then use that land equity to get to the permit status to move forward with construction. What are your thoughts on that structure? I am talking to attorney's to setup the SPV right now and put the land into it.
Section 8 Launch52 Reviews
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
My experience is that the major platforms want two things
1- sponsors with a verifiable track record of success in the same property type
2- sponsors capital investment in the project
Sponsors utilizing these platforms have a large "gap" to make up - that being the difference between the amount of capital raised and how much of that capital goes into the actual asset, vs how much goes to fees, costs, etc.
The attraction being that the sponsors believe that the platforms will raise the $, so they're out of that end, well maybe, maybe not so much.....
I've raised over $500 million in syndication and funds. We use our own platform, and operate under Reg D 506 C.
@Robert Ellis, you're obviously very experienced, and have a valuable property and deal going, well thought out and planned. The majority of people I see on BP asking about syndication lack any track record of success, do not have sufficient knowledge of the property type specifically or real estate principles, financing and law in general, and have little or no capital. There thinking goes something like this - I can buy this great property for $5 million cash flowing $600k per year (they neglect expenses). If I do it with a syndication I will have no debt; the investors will get a 6% ROI and I'll keep the rest ($300k per year). Plus, since no. debt I won't have any liability. If necessary I can borrow any funds I do need thru Pace Morby.
- Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes1y
Quote from @Don Konipol:
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
My experience is that the major platforms want two things
1- sponsors with a verifiable track record of success in the same property type
2- sponsors capital investment in the project
Sponsors utilizing these platforms have a large "gap" to make up - that being the difference between the amount of capital raised and how much of that capital goes into the actual asset, vs how much goes to fees, costs, etc.
The attraction being that the sponsors believe that the platforms will raise the $, so they're out of that end, well maybe, maybe not so much.....
I've raised over $500 million in syndication and funds. We use our own platform, and operate under Reg D 506 C.
@Robert Ellis, you're obviously very experienced, and have a valuable property and deal going, well thought out and planned. The majority of people I see on BP asking about syndication lack any track record of success, do not have sufficient knowledge of the property type specifically or real estate principles, financing and law in general, and have little or no capital. There thinking goes something like this - I can buy this great property for $5 million cash flowing $600k per year (they neglect expenses). If I do it with a syndication I will have no debt; the investors will get a 6% ROI and I'll keep the rest ($300k per year). Plus, since no. debt I won't have any liability. If necessary I can borrow any funds I do need thru Pace Morby.
Thanks for the comments Don. What is the platform? Are you saying you made your own site and constantly are raising equity? would you mind sharing it I'd love to check it out. Are you raising for more single purpose funds and SPVs or perpetual open ended?
We've looked at doing this for a land development fund, horizontal development fund, subdivision I think is best as SPV for new construction or build to rent, I've been talking to groups but it seems horizontal lot development in the south east United States is getting the most interest from an equity perspective. we want to set that up this year.
is your experience more in syndication for debt or equity and what types of assets and strategy? would love to discuss in depth same goes back to you. Your knowledge shows your experience
Section 8 Launch52 Reviews - 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Quote from @Robert Ellis:
Quote from @Don Konipol:
Quote from @Robert Ellis:
Has anyone here successfully raised over $1M in equity for a real estate deal using an online platform? If so, which one, and what was your experience? I’m evaluating:
1️⃣ Fundrise – Open to all investors, $1B+ deployed, low fees, good for smaller raises.
2️⃣ CrowdStreet – $3B+ raised, focuses on large commercial deals, accredited investors only.
3️⃣ RealtyMogul – $500M+ raised, REITs & individual deals, open to non-accredited investors.
4️⃣ EquityMultiple – $300M+ raised, high returns, accredited investors only, mix of equity & debt.
5️⃣ Yieldstreet – $1B+ raised, alternative assets beyond real estate, typically $10K+ minimum.Would love to hear from anyone who has successfully raised capital on these or other platforms!"
My experience is that the major platforms want two things
1- sponsors with a verifiable track record of success in the same property type
2- sponsors capital investment in the project
Sponsors utilizing these platforms have a large "gap" to make up - that being the difference between the amount of capital raised and how much of that capital goes into the actual asset, vs how much goes to fees, costs, etc.
The attraction being that the sponsors believe that the platforms will raise the $, so they're out of that end, well maybe, maybe not so much.....
I've raised over $500 million in syndication and funds. We use our own platform, and operate under Reg D 506 C.
@Robert Ellis, you're obviously very experienced, and have a valuable property and deal going, well thought out and planned. The majority of people I see on BP asking about syndication lack any track record of success, do not have sufficient knowledge of the property type specifically or real estate principles, financing and law in general, and have little or no capital. There thinking goes something like this - I can buy this great property for $5 million cash flowing $600k per year (they neglect expenses). If I do it with a syndication I will have no debt; the investors will get a 6% ROI and I'll keep the rest ($300k per year). Plus, since no. debt I won't have any liability. If necessary I can borrow any funds I do need thru Pace Morby.
Thanks for the comments Don. What is the platform? Are you saying you made your own site and constantly are raising equity? would you mind sharing it I'd love to check it out. Are you raising for more single purpose funds and SPVs or perpetual open ended?
We've looked at doing this for a land development fund, horizontal development fund, subdivision I think is best as SPV for new construction or build to rent, I've been talking to groups but it seems horizontal lot development in the south east United States is getting the most interest from an equity perspective. we want to set that up this year.
is your experience more in syndication for debt or equity and what types of assets and strategy? would love to discuss in depth same goes back to you. Your knowledge shows your experience
In 2002 I founded a fund to invest in hard money loans that I originated. The fund capped out at $5 million holding about 25 notes at any one time. In 2005
I began a second fund with the same criteria, and similar results.These funds were finite life 3 year funds; the original fund was renewed twice by a vote of the investors (unit holders - limited partners) and the second fund renewed once. By 2013 both funds had been wound down and principal returned to investors. BTW, these were both Texas only fund, exemption from registration was via the intrastate exemption, and compliance was with the Texas Securities Board, where the offering was filed and reviewed to be in compliance.
in 2014 I started a Reg D 506 C note fund, with the emphasis on note sizes much larger than the Texas only funds - $400k - $5 million. In 2016 we started a real estate equity fund, again utilizing the Reg D 506C SEC "safe harbor" for private offering exemption from SEC registration.
Initially in our setup, we used a "off the shelf" platform that wasn't fully suited for what we wanted. When the software provider gave us notice of a fourfold price increase, we began searching for an alternative.
Our "funds" are structured as series LLC. So, we are required to file Form D with the SEC only once - for the "parent" LLC. Each note we purchase is in a separate series, hence only a single asset make up a specific series, and there is no cross liability. investors who have registered with us and provided sufficient proof of accredited status, are presented with the opportunity to invest in a specific series, with the only asset of that series being a single note. We have essentially done the same thing with the equity offerings, thou on a somewhat smaller scale.
Since an accredited investor can choose to invest in one or more of our individual offerings (series), and each offering is a single note or single real property, the offering mirrors a syndication offering rather than a fund offering. We are open to accredited investors across the entire country, and invest in property and notes nationwide.
During our search for a replacement platform, we came across a system developed specifically as an in-house platform for a private lender we knew. Having spent significant money developing the platform, they wanted to monetize their development but knew the platform would need significant improvement to be salable. We made a deal with them where we lease the platform for a modest, almost token payment, but have provided significant input in improving the system. We actually hired our own software engineers to modify the system for what we needed, and allowed the developer access to and property rights to what we developed in exchange for a long term license at low cost. Further, the system has been modified to be very robust for real property as well as notes.
There are three main areas of the platform
1. in house use - "deals" are inputed into the system allowing access to all documents, deal status, remaining work to close, pricing, etc to both my partner, my self, and both of our other 2 employees. Mortgage brokers who register with us can input loan requests directly, add documentation, check status of their loans, etc.
2. information - concerning loans, loan requests, referrers, investors, etc. are all available in a variety of reports. The platform automatically directs our bank to ACH distributions to investors when income is received or an asset is paid off or sold. Loan interest nis calculate and invoices automatically emailed.
3 - Investor use - investors can access their own accounts with information on their past, current, and proposed future investments, distributions, interest, etc. They are also able to access new investment opportunities and all documents related thereof. Further, they can arrange to wire or ACH funds to us for units purchase, sign Operating Agreement and Subscription Agreement, and download or read PPM.
- Investor · Passiveadvantage.com · Member since 2019 · 166 posts · 91 votes1y
Great conversation here. I am curios to the specifics of how these crowdfunding platforms charge if your wiling to share? Do they create an SPV? Do they get GP shares? Some charge a technology fee or marketing fee? I believe passive pockets charges something like that for deals to be listed. Just curious to compare the specifics in regards to the way these companies charge/make money from the sponsors?
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Duke Giordano:
Great conversation here. I am curios to the specifics of how these crowdfunding platforms charge if your wiling to share? Do they create an SPV? Do they get GP shares? Some charge a technology fee or marketing fee? I believe passive pockets charges something like that for deals to be listed. Just curious to compare the specifics in regards to the way these companies charge/make money from the sponsors?
Each is different - Reg CF (crowdfunding) I believe they take a percentage of the money raised. We did a Reg A and pay a monthly fee to a platform to use. We also have a broker dealer for compliance reasons which takes a percentage of the proceeds we raise as well.
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