How I Raised $5 Million to Buy an Apartment Complex in 2 Weeks — While on the Beach


Before I became a full-time real estate investor well over a decade ago, I worked for a city’s public safety department, which is a combined police and fire department under one roof. It’s sort of an identity crisis by design, where one day you are driving a bright shiny rig, getting five-finger waves from the kids, and the next day you are trolling the hood in a black and white, getting… well, let’s just call it a different symbol of affection.

Having been on the scene of such a wide variety of incidents, from homicides to tanker fires to mediating “my neighbor is using my garden hose” disputes, there was never a shortage of unbelievable stories to tell. When my non-police/fire friends would ask me about the strangest thing I’d seen, I never had to make anything up. The truth is stranger than fiction!

How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties

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Am I Making This Up?

Is this truth or fiction? Did I really raise $5 million to buy an apartment complex in only two weeks — while vacationing on the beach? YES, this actually happened! Now, if I had a book, guru course or boot camp to sell, this is where I’d say that anybody could do it, and if you send me $995, I can show you how. But I have none of those things, so I’ll just tell it like it is. No charge.

The instructions for raising money are not as simple as “go to the freezer, take out the box, microwave on high for 3 minutes, eat.” There is nothing either simple or quick about raising money to grow your business. The truth is that not everybody can do what I just did (more on that later). If you are looking for a shortcut to using Other People’s Money (OPM) on a large scale, you won’t find it here. If you want the truth about raising money, read on.

Related: How to Purchase Apartment Buildings Without ANY of Your Own Money


You Have to Set Yourself Up First

Sure, it’s important that you have a great property for your investors and a solid business plan to maximize its potential – but that’s the end, not the beginning. The real work isn’t about finding a great property. It’s about building trust with potential investors. It’s about performance, or better yet, outperformance. What you’ve done is just as important as what you are about to do, so you have to till the soil before you can pick the harvest.

If you have been trying to raise money, but only achieving anemic results, you’re not alone. I read a statistic once that said that the average real estate syndicator raised $250K. Why do most people struggle to succeed? Oftentimes it’s because they are trying to play a game that is out of their league. Consider this advice: You must first understand your position in order to change your condition.

Be real with yourself: What is your position? “I’ve been reading books for two years, and I want to quit my job and buy apartment buildings, but I can’t seem to find anyone to invest with me” is a statement that I’ve heard many times.

This very statement implies a lack of understanding of one’s position. If you lack experience, it’s not likely that you’ll be successful in raising money to buy apartment complexes right off the bat. No one is going to invest money in you if you can’t show them that you can do what you say you can do. Just telling them won’t cut it. If you think you are ready, what do you have to show for it?

You’ve Got to Start Somewhere

Start small if you have to.

Don’t get me wrong, like many visitors to BiggerPockets, I started with absolutely no money, no rich friends, no wealthy family and no advantage. I told this story already on the BiggerPockets Podcast Show 3 and Show 76, but in case you missed those, I’ll summarize.

I’ve been in REI for over 25 years. I’ve bought, fixed up and resold over 600 houses. I’ve acquired over 100 rental houses and several apartment complexes, comprising hundreds of units in three states. When I left my law enforcement career to grow my part-time REI business into a full-time operation, I raised $500K from my coworkers with placements as small as $5,000. I was only able to do this because I had a couple dozen successful single-family flips under my belt and everyone knew it. They were investing in my flipping business, which allowed me to grow a proven model. They did not invest in a new, unproven model.

Eventually I was able to buy a few rentals using the profits from my flips, then a small apartment complex, then another, and then move to larger ones. Each strategy that I was able to prove, I grew by purchasing progressively larger properties with OPM. Over time I’ve built what was a fledgling business to a $50 million organization fueled by over $25 million raised from high net worth investors and family offices.

I didn’t get into the position of raising large amounts of capital and doing large deals overnight. It’s unlikely that you can either, so start laying the groundwork now. Aim low in the beginning. Raise smaller amounts for smaller deals first, prove yourself, and you will grow organically. There are no shortcuts. You must have integrity, build a track record, and earn trust. Without all three, it doesn’t work.

Discipline Drives Success, Success Attracts Capital

I’ve underwritten over 160 multifamily properties since my last acquisition, done numerous property tours, made several offers, and tossed out hundreds of properties that didn’t meet my criteria. While guys like Ben Leybovich, who said I wouldn’t ever find a deal good enough to meet my strict criteria in today’s market, might be surprised that I’m now buying something, I’m not surprised at all. The “Success Ratio” has stood the test of time: Underwrite 100 properties, make 10 offers, buy one.

Why so much effort to buy just one property? Because you have to be disciplined! I’m disciplined because I’d rather lose half of my clients than half of my clients’ money. You need to be just as careful with other people’s money as you would be with your own. You can’t afford to screw this up. Trust that takes years to build is destroyed in an instant if you lose your investors’ money. Every property you buy is a future component of your track record and you need to be disciplined in order for your track record to be successful. Getting too aggressive or making unachievable assumptions will result in your deals underperforming in the real world.


How it Happened

This property is just under 300 units and located in a major market in Texas. The interiors and exterior are tired and neglected which compromises the property’s income. All of the problems are easily correctable, it just needs capital and attention.

I signed the purchase contract the day before I left for a pre-planned vacation to Hawaii. Fortunately, I have a great team so I set everyone free to perform their role. The same day I descended upon the beach, my due diligence team descended on the property to spend several days there going through it with a fine-toothed comb. Simultaneously, I need to raise $5 million. No big deal. I meet with Bob, my director of investor relations. I tell him, “Bob, I’m going to Maui. When I get back it would sure be nice to have commitments for that $5 million.”

OK, so now the cat’s out of the bag. Now you know that the secret to how I did this from the beach is that I’m not in this by myself. As you grow, you will build your team. Until you reach a certain scale, you can’t support a full-time staff, so you’ll have to do the work yourself. Don’t try doing this from the beach, and forget about the four-hour workweek. You have to put in the time and the effort or it simply won’t happen.

Related: How to Invest in Real Estate with No Money Down (4 Rules You NEED to Follow!)

Fortunately for Bob, we have hundreds of investors who have trusted us with their funds in previous offerings, and we have performed well for them. Many of them have referred their friends, and many other people have heard about what we’re doing and have asked to be the first to know when we launch the next opportunity. As you grow your business and establish your track record, this will happen for you as well. With ready, willing and able investors on standby, it’s easier to raise larger sums in shorter times. For those who haven’t invested with you in the past, a well-documented track record goes a long way to getting them comfortable. I can’t emphasize that enough: Make sure you develop a strong track record, and document it thoroughly so you can paint that picture for those people who didn’t take the ride with you.

Can You Do This?

Earlier I said that not everybody can do what I just did. Having read this story, do you agree? To raise $5 million in two weeks, you need to have everything lined up in advance. It’s fair to say that I actually started raising capital for this deal over 20 years and 700 properties ago, when I took in my first investor dollar for a house flip. So get started now. Create your relationships. Build your track record by demonstrating performance… and document it. Develop a following of high net worth investors. By the time you have all of these things, you are no longer “just anybody.” You are a responsible financial fiduciary. You are an expert in your field. You are proven. You are a disciplined and successful investor. And people know it.

So what about Bob? Did he pull it off? By the time I got back from my trip, Bob had commitments for over $6 million, $1 million more than we needed. The investment is not only fully subscribed, but has a waiting list. And a head start on our next acquisition.

If you want to move up to larger deals and raise capital to fuel your growth, start building your network. Do deals, even if just simple and small ones. Document them. Produce results. Be known. Methodically push your comfort zone to grow the size of your deals at a measured pace. Don’t try to go too big too soon. Back in my public safety days I used to joke, “When was the last time that the fire department was called because someone did something smart?” So by all means, don’t screw up and burn down your own career. I can’t respond to the scene to rescue you.

Investors: What has been your experience in raising money for big investments? Have any questions about the process?

Be sure to leave a comment below!

About Author

Brian Burke

Brian Burke has raised tens of millions of dollars from accredited investors and family offices during his 25+ year real estate investing career. His focus is on residential real estate but has also done development, self storage, and commercial deals. Brian has completed more than 500 single family flips and has acquired nearly 1,000 residential rental units comprised of large apartment complexes all the way down to single-family homes.


  1. serge s.

    Congrats Brian! I also had some doubts that an adequate deal that meets your criteria could be sourced in today’s environment. Do you underwrite any differently for a MF deal that you are purchasing for yourself? Is the criteria any different in terms of building profile? Are you still growing your personal portfolio and if so would be very curious as to what your buying. Good work and thanks for sharing.

    • Brian Burke

      Thanks for commenting, Serge. If I were buying for my own account I’d underwrite the exact same way because it’s been proven to work and produce results, while leaving a margin of safety in case the market fails to cooperate for a period of time. I would want the same thing for myself that I want for my investors. That said, there’s a really good chance that I’m done building my personal portfolio. At this juncture I’d rather invest in my own offerings alongside my investors. If you had the choice of buying a 20 unit on your own, or contribute 5% of the capital to buy a 400 unit which would you pick? I’ll take the slice of the larger pie because I can leverage the infrastructure and economy of scale that comes along with it.

    • Brian Burke

      Thanks for reading, Scott. I appreciate the kind words. My wife knew me when I was an 18-year old grocery bagger. She takes issue with your characterization of me as a legend. LOL. I forgive her though, I wouldn’t even have that title used in the same paragraph as my name if it weren’t for her.

  2. Ben Leybovich

    You either love me beyond any rationale, or hate me beyond any rationale…

    Brian, as I said last night, it takes a discerning eye to recognize that your approach and perspective are an exquisite work of art. The breadth and depth of your perception of the story at hand, which is reflected in the underwriting methodology and technique, is nothing short of…well, a work of art.

    Our friend Brandon Turner likes to talk about how RE is all about the numbers, and one has to “do the numbers”. This is true, but the art is in knowing which numbers, when, where, why, and by how much!

    I am a big fan, my friend! Even though you seem to take extraordinary pleasure in pushing my buttons 🙁

    • Brian Burke

      Well, Ben, as a master of performing art you would know art when you see it. I’m no Picasso, and I certainly can’t create an enjoyable musical sequence like you can…but one thing I can do is create a financial and anecdotal picture of a Multifamily property.

      Brandon is right, it is about the numbers, but the trick is knowing what “running the numbers” really means. Not only doing it right but articulating it in a way that is understandable to lenders and investors. After all, without both of them I wouldn’t be doing what I’m doing.

      And don’t worry, I won’t crash your fishing trip with Serge, so you get a break from my button-pushing for a few days. Hopefully Serge will take my place.

  3. Brian –
    How were you able initially to syndicate at that level without violating SEC rules? My understanding is that while you can “assemble” funds from friends, family, and other known individuals who are not accredited investors, you cannot solicit more broadly except to accredited investors and only then with adequate disclosure documents (PPM, etc.). Or did you not go outside your group of coworkers, etc? I get the basic point, that it was your track record over time that has allowed you to syndicate larger and larger deals, but think it’s important that newer investors be aware of the restrictions on solicitation.

    • Brian Burke

      This is a great question, John. You are correct that you cannot generally solicit unaccredited investors (although now there are rules coming into focus allowing you to solicit accredited investors if you follow specific criteria and procedures). This was a big obstacle for me–I didn’t know any accredited investors when I started out. I raised my first fund by following the rule that allows you to have up to 35 investors, who don’t have to be accredited, so long as you have a “pre-existing personal or business relationship”. In other words, I knew every one of the 28 people that invested in my first fund, and took investments as small as $5,000. I didn’t know the rules so I had my attorney set it up, and anyone who is contemplating raising money from others needs to talk to an attorney before talking to a single investor.

      It was an anemic start but at least it was a start. It allowed me to raise enough money to flip over 20 houses per year and it worked great. Then came the great recession. The volume of opportunity allowed me to scale my business to over 100 houses per year by growing my investor base, which I was only able to achieve by leveraging my experience and track record developed by my little fund of friends. That track record got me recognition because during the course of doing those deals I met people along the way–people who saw what I was doing and introduced me to other people and so on. Then came recognition in the press–articles in the paper that featured what I was doing–and then people were coming to me people with significant resources. This is a relationship business that depends heavily on WHO you know coupled with WHAT you know and most importantly WHAT you’ve accomplished. In fact, I think that’s the whole point of the article–that there aren’t any shortcuts and that no matter how small you start, you have to start if you ever want to achieve your goals.

  4. Jeff Banker

    Great article Brian! You have set the bar for syndication REI with this example. Thank you for sharing it and proving that using tough criteria and how your effort over time to develop these skill sets can and will payoff. I could easily use your example as my target using “the one thing.” Congratulations, and thanks again for sharing.

  5. Roy N.


    Great article and very accessible. The only point where I would slightly disagree with you is the statement:

    “You need to be just as careful with other people’s money as you would be with your own.”

    I would go a little more conservative and say “you need to be more careful with other people’s money as you would with your own.” 😉

    I too am amazed you’ve found a multi worthy of purchase, but then again, I’ve only underwritten 50(ish) deals in the past 20 months and have had to start looking further afield as there just isn’t the inventory in our familiar area(s).

    • Brian Burke

      Great point Roy. You are absolutely correct. My first flips were done with my own money (albeit borrowed from credit cards!) and my first Multifamily property (and second, third, and fourth etc) were bought without investor money. Why? To be more careful with investor money than I am with my own meant that I needed to prove my concept and ability with my own money at risk as opposed to using the funds of others to “practice”. Thanks for pointing that out!

  6. ericka williams

    Like this article. At the end of the day if you are hitting the hammer in real estate as a agent, investor, flipper or buy and hold, people notice. I have a friend who posts on his facebook page once every three months when he buys new properties and people slowly but surely jumped on board to invest with him 2 years later. Why because he was consistently moving forward. Same for me the more apartment leases I close and people need to move they call me its good to share your success here and there. consistently is key.

  7. Matthew Rembish


    Thank you for taking the time to put this all in writing. A lot of the points you made really clicked with me and opened up my eyes to things I thought I understood but am now seeing in a different light. I’ll be saving this one!


  8. Knowing your work ethic, I clicked expecting to read a story about you making phone calls to investors between sips of your Mai Tai ^^

    Nice systems you have in place.

    You should go on that fishing trip with Ben and Serge and record your conversations. Transcribe them and you’d have a pretty good book.

    (Or auction a fourth spot to someone and get all your guys trips paid for. If I were in the U.S., I’d make a bid! ^^)

    Nothing like leverage in real estate, whether it’s OPM or your track record of successes.

    I’m out here hustling and trying to build that up. I’m was out late on Friday night at a real estate event – usual Korean style networking – food, booze, & singing ^^. Came in around 2am, and starting emailing the contacts I met. I was able to get a meeting with one prominent developer out here – I used the line: it’s 2:30a and I’m emailing you because when it comes to real estate, I’m determined..

    Great story, & I hope to see you sometime when I’m in the Wine Country ^^

    • Brian Burke

      HA! I used to do stuff like that, Daniel. Now I work hard so I can go on vacation, not so I can work hard while I’m on vacation! That’s part of the process though, you do what you have to do until you can grow to the point where you can build your team to the point that things can get done even if you aren’t there that day.

      You know, I didn’t even think of auctioning off a seat at Ben & Serge’s fishing trip. That’s a great idea and I can do that without even going. I’ll go look up my eBay password…

      Sounds like you are making stuff happen! Even at 2:30AM! Keep up the good work, it’ll pay off.

      • Make sure the seat on the fishing trip goes to an ardent believer in buying $30,000 houses ^^ That should make for some fun conservations.

        I’ve got the business here in Korea systematized.. Working on doing the same with Real Estate.

        Then I can enjoy my “4 hour work week”.. LOL

        Thanks for all the encouragement.

  9. Bryan Rodriguez

    Mr. Burke,

    Congratulations on your success. It is very inspiring. I plan to present my first project to potential investors. I was hoping you will be interpreted in providing a presentation template or something of that nature. I am assuming you use a Microsoft application. Thank you for your time and looking for to hearing from you.

    • Brian Burke

      Hi Bryan, congratulations on your upcoming project! Presenting to investors isn’t about software, slides and bullet points. It’s about YOU, and about showing your potential investors who you are, how you think, how you perform, and how you handle the unexpected. The best presentations are conversational interactions more than presentations. I’ve been doing this long enough to know what questions potential investors have and I can go into a meeting and just talk about my background and my accomplishments and my plan. Along the way I’ll answer 90% of their questions simply by covering those three things. Since everyone’s story and plan are different, there isn’t a standardized template. Just go in there and be yourself and tell your story. If you don’t get any traction then you know it’s time to beef something up. I get it…it’s easier said than done…but it’s just the truth.

      • Bryan Rodriguez

        “…if you don’t get any traction then you know it’s time to beef something up…” That sums it up. I like the truth. I will tag you on my newbie success story after I make my first sale this August to validate if it’s a distinguished track record. Thank you for the your time and support.

  10. Brian, truly inspiring for me. I’m in that initial stage now of acquiring small properties, building a group of investors and establishing a track record for the future. I look to people like you for inspiration. Hoping I can replicate what you’ve already accomplished. Maybe some day we can go for an airplane ride together somewhere cool!

    • Brian Burke

      That’s awesome, Mark. That’s the way it’s done! It sounds to me like you are already replicating what I’ve accomplished and someday you’ll probably blow right by me. So, yes, we can absolutely go for that airplane ride! When you get your jet you can take me to Hawaii. LOL.

  11. Bennet Sebastian

    Thank you Brian! Your article just reminded me that (despite being in my 40’s) I’m still in the early stages of my investing career. I’ve flipped five small commercial properties in the past three years using my own funds but have also put together a private placement for a fund to go after some larger stuff. While I’ve done well, I’ve been disappointed that I haven’t moved up to the next level as quickly as I had planned. But that’s Okay, I really do need to continue building my track record with my own funds before making the leap to using OPM for larger deals. Unfortunately, and oftentimes to my detriment, patience has never been a virtue for me. Thanks again for sharing your story.


    • Brian Burke

      Great story, Bennet. I know what you mean, I was impatient too and in the early stage of my career I was really frustrated that I wasn’t growing fast enough. Looking back I think it all worked out for the best. Organic growth just feels better to me than premature forced growth and has a lot less risk of blowing the whole thing up by growing too big before I was ready.

      If you want to grow larger you should consider raising OPM even for smaller deals that you can take down on your own. Instead of buying one property by yourself, buy 4 of them and you put some of the money into each with investors contributing the rest. By doing this you’ll grow your investor base and your investors tell their friends, etc. If you do tons of deals on your own no one even notices and then when you go out to raise money, you’re unknown. You can do a great job growing your own portfolio but what people really take notice to is when you grow THEIR capital. Word gets around…

      Just a thought. 🙂

      • Bennet Sebastian

        Great point Brian, thank you. I know that to be true but my challenge thus far is that I don’t see very many deals that make sense and therefore it’s not a choice of buying one versus buying four. As you know equity is expensive but if the deal size requires me to go that route then paying the typical 8/80 for equity becomes easier to swallow, especially if their are fees involved.

        Thanks again for giving us newbies your time and wisdom.

  12. Katie Rogers

    I read this all the time, “…make 10 offers, buy one.” In California, if you make ten offers and ten offers are accepted, you have bought ten properties because the offer once accepted becomes the purchase agreement. So how can anyone make ten offers without suddenly finding themselves way over-committed.

    You also said you had the property under contract BEFORE you had the money to buy it. Every offer I have ever made required a proof-of-funds. How do you get around that?

    • Brian Burke

      Great point, Katie! If you are offering on ten out of 100 properties, chances are that you are writing the offers in sequence, not in parallel. Of course there is the chance that you have more than one active offer out there at the same time, which I would only recommend if you could close on all of the active ones if they were accepted. In the article at hand, this was a multifamily purchase, which initiate with a letter of intent not a binding purchase contract. You have a good idea of where you stand during the LOI negotiation stage and you can always recuse yourself from the process if you get an LOI accepted on a different property. It’s pretty common. Note that you wouldn’t want to back out of an accepted LOI if you want your reputation to remain intact, but it’s not a big deal to pull your LOI before it’s accepted if you are awarded a different deal.

      As to question #2, this is another distinction between larger multifamily acquisition and single family. It’s true that sellers of single family want to see proof of funds. When you are buying a large apartment complex, the seller would love to see a proof of funds but they know that it’s uncommon for them to get one unless the buyer is a fund. A large number of these deals trade to syndicators that raise the money for the deal and sellers understand that the funds aren’t already there. They do want to know that you can raise the funds though, so you’d expect to get grilled on how you will raise the funds and you have to be prepared to answer questions about your investor base and your previous history / experience in fundraising.

    • Brian Burke

      Thanks for the feedback, Nate. I’m happy to share more about how I think and underwrite. Stay tuned over the next seven weeks as I describe it in more detail in my article series about “Multifamily Myths”. There…you heard it here first!

  13. Alice K.

    Thank you so much for sharing Brian! You’re super inspiring.
    I often get overwhelmed with the stories here but really love even your comments to other users.
    Sometimes I feel like a spec in the grand scheme, and I love how you backed up to describe it as a journey.

    Were there organizations / people that you found invaluable along the way as a beginner?

    • Brian Burke

      I appreciate the kind words, Alice! Not to worry, we are all specs in the grand scheme. Or maybe we are better described as seedlings that, if properly watered, will grow over time.

      Yes, there were organizations / people that I found invaluable early on. 1. the banks that issued my credit cards. 2. private money brokers. Now I rely on neither, but I wouldn’t have got here if it wasn’t for those two in the beginning.

    • Brian Burke

      I look at it from the opposite angle, Kirk. The money didn’t cost me anything. Rather, it provided an opportunity for me to participate in a deal that I wouldn’t have had the opportunity to participate in without the outside capital. And the reverse is true, the investors are now able to participate in an excellent opportunity that they would have missed out on without me putting it together. It’s a win for everyone.

      That said, it’s only natural that the investors participate in the cash flow so you could consider that to be a “cost” to me. While the investor waterfall may vary from property to property, generally the investors receive 100% of the profits until they reach a pre-set return, then a percentage of the profits thereafter with the provision that there are incentives to me as the sponsor when certain performance benchmarks are exceeded.

  14. Tony Gatto

    Brain…. This post is dead spot on… How do i know? We are at the beginning of exactly what you quoted as starting small…. I documented it all on (hope its ok to post that here) . We even did some mobile homes just to get a track record ( and make great profits , don’t tell ) .

    We currently have 4 investors that would work with us and its all due to starting small and growing a little bit at a time. I would add that it does require some serious patience, focus and be willing to tell people what you are doing.

    Thanks for a superb post Brain

  15. Michael Rogers

    Great post, Brian. Congrats on the new deal. I’ve borrowed from local banks for the last 15 years, but have started using private investor money the last couple years along with bank money. What you have done with your business is what I’m aiming for one day. Congrats on your success!

    • Brian Burke

      Thanks Michael! Sounds like you have the right combination augmenting banks with private capital. That’s exactly what happened on this property, $11 million came from a lender and $5 million from private capital. I guess I forgot to mention that raising that money from the investors wasn’t the only task at hand during escrow!

  16. Erik Drentlaw

    Brian, your post was very informative and I really appreciate it!

    I am so tired of people saying, don’t worry about a track record, create a packet with a potential deal, and e-mail all your family and friends. You will soon be able to purchase large apartment building with no money!

    I am curious though, for someone starting out do you thinking starting in flips and working towards multi family is still the best way? Could you have been as successful only participating in buy and hold properties? I’m guessing flips made you more active and involved with investors in order to transition to larger properties. Only buy and hold would have just been too slow unless you had large amounts of capital sitting around?

    • Brian Burke

      When someone with no experience follows the advice that you mentioned, one of three things will typically happen. 1. They don’t raise the money and then have to cancel the deal, thereby damaging their reputation with the brokers. 2. They do raise the money, but their lack of experience causes them to fail to achieve their projections, thereby damaging their reputation with their investors. Or 3. They raise the money and do a great job. I tend to think that #3 is the outlier.

      One thing I’ve learned about investors is that they love to see two things: 1. A solid return. 2. Their money back. I think that doing flips in the beginning can accomplish both of those objectives in a shorter time (if done correctly). Buy/hold takes longer to show a meaningful return and get capital back. It comes eventually, but if you are trying to grow it can impede your speed. The other advantage with flips is that by definition something is happening all of the time: buying, selling, buying, selling. These multiple touch-points mean that you are forced to get to know your investors better, and they get to know you better.

      It’s just one approach…doesn’t mean that it’s the right approach…it just happened to work for me. Your mileage may vary.

  17. Bob Dreher

    This article is spot on! Watching our fearless leader in action is absolutely inspiring!! His strict adherence to underwriting standard ensures a built-in ‘margin of safety’ for investors. I am so fortunate to be an integral part of the Praxis team under Brian’s leadership…even if I’m not the one on the beach!

    • Brian Burke

      I know you’ll get your turn on the beach, Bob! Now is a good time. I’m looking for the next great property to buy so you can probably slip in some beach time before I give you another two-week $5 million assignment. 🙂 Great job on this one, by the way. I knew when I got on the plane that you would do it.

  18. kirtley Whittington

    Great article Brian! Very inspiring and definitely gets my wheels turning. I am in the early stages of RE investing and share many similarities with how you described your beginning days. I have several duplexes and have flipped a hand full of houses. To this point, I have used my own funds combined with local portfolio lenders. I’m curious as to how the financing is structured using other peoples money for long term buy and hold Multi Family acquisitions? I’m sure that most deals differ, but is there a common theme?

    Do you set it up on a long term loan, i.e., 15 year, or is it typically a shorter duration before your investors’ original capital is paid back? Are they paid a preferred yearly rate until the property is sold and then repaid their original principal amount? Do you add value and then refi with a larger commercial lending institution?

    Sorry for asking so many questions but I am really curious as to how this ‘typically’ works.

    Thanks a lot!


    • Brian Burke

      Great questions, Kirtley. It sounds like you’ve laid the groundwork for a great start and a launch point to grow to the next level. For offerings such as this one, I don’t borrow from the investors, rather, they invest in the property as an equity owner via contributing capital to the LLC. You’re right, it does vary from one offering to another but generally the investors receive 100% of the profits until they reach a specific annualized return, then a percentage of the profits thereafter. There are a lot of nuances to how the profit split tiers can be set up, and it can be simple with only one tier or complicated with multiple tiers.

    • Brian Burke

      When buying an income property, you are really buying the income stream. The property is what produces that income stream, sure, but accurately defining what that income stream is, what it can be, and how to get it from there to there is the primary question. Underwriting is the process of doing the financial analysis to answer that question.

  19. Siraj Ahmed

    Hi @Brian Burke, great read! Congrats on your success!

    Question – when you mention “document your success”, what do you mean? From finding an investor perspective, are you recommending documenting your current success so that you can show potential investors? If so, how do you document besides just showing ROI on my current rentals? If you can share some information on this, I would really appreciate it.


    • Brian Burke

      In my opinion there are several things you can do to document your track record, Siraj. Here is what I’ve done: 1. I have a list containing the addresses, purchase date and price, sales date and price, profit, rent amount, etc of every property I’ve bought all the way back to day one. 2. I have an exhibit that shows my track record specific to apartment complexes that shows my projected income and return versus actual income and return along with a description of each property in paragraph form. 3. I have before and after photo exhibits of both single-family and multifamily projects.

      Visuals are great, pictures, charts of income, lists of properties, etc. If your track record consists of owning four rental homes, your documentation might be a couple of pages showing a before and after picture of the inside and outside of each house, the amount you paid, what you rented it for, and what it is worth. That’s a basic overview, from that point you can get as fancy as you want.

  20. Shaun Spalding

    Hi Brian,

    Thanks for the positive and realistic article. I did have a question in regards to how you structured your early investing deals. You mentioned soliciting friends/ co-workers early in your career, how did you structure the investment/ payback at that time? Was there a contractural percentage paid back per year over a specified amount time based on your due diligence during the underwriting process?

    Also, any good books that you’d recommend for structuring deals with investors? Kind of an example and best approach type book.

    Thank you for your time

    Shaun Spalding

    • Brian Burke

      Thanks for the feedback, Shaun. My first investor-funded deal was a very simple 50/50 split. I got 50% for doing all of the work, and the investors got 50% for providing the capital. As the nature of my projects changed the terms changed as well. In the multifamily space, I offer investors 100% of the profits until they reach a certain annualized return, then after that the profits are split with the investors receiving the majority of the profits as per a split schedule, typically starting at 70% but each of these are specific to the property and may vary in one direction or the other.

      As for books, there are plenty out there. Check out some of the books by Gene Trowbridge and David Lindahl and also search the BP forums for book recommendations. There are plenty of opinions on that topic!

  21. Nick Kapetanis

    Thank you for sharing your wonderful story. I have to admit that after you mentioned you were not selling a course or a book I paid a lot more attention… lol!

    I have been thinking about apartment investing. I am willing to put the time in to better understand the “ins and outs” but do not know how to put together a due diligence team. Any suggestions?

    With thanks,


    • Brian Burke

      Thanks for the feedback, Nick. Good idea to put in the time to learn before you jump in. A due diligence team is pretty easy…reach out to property management companies that specialize in the size and class of property you intend to buy. Most of the larger companies and many of the smaller ones offer due diligence services for a fee. The trick is making the right selection. Quality varies so you need to ask a lot of questions and meet with your top candidates in person.

  22. Carl S.

    Hi Brian
    Thank you this was a great, motivating read! If at all possible please could you assist or share with me the following,
    – How have you structured your company in terms of the entity? Did you have to change this at anymore during your journey?
    – How do you manage investment equity? Do you allocate to specific properties or perhaps just shares in your company?
    Kind regards

    • Brian Burke

      Sure thing, Carl.

      My focus is on apartment complexes larger than 100 units so my entity structure may or may not apply to other asset classes but here’s what I did.

      My company is an S-Corporation and all of the apartment complexes are owned by subsidiaries of the corp. For example:

      The property is owned by a sole purpose entity which is a single-member LLC. The member of that LLC is a multi-member LLC which is comprised of investors as members and my entity as the managing member.

      Equity is allocated to a specific property only, by virtue of the investors investing in the multi-member LLC that I mentioned above (each property has it’s own similar structure). I don’t issue shares in my management entity, always in a subsidiary. I do have some “blind pool funds” where investors contribute capital to an LLC that buys multiple properties but that is only in my single-family models at this time.

      My entity structure is complex, but not for asset protection like you see promoted all over the internet. It is complex because that is how you segregate investors in the various offerings that they are participating in without cross-pollinating amongst other properties. It isn’t a good structure for an individual buying their own smaller properties. It would be overkill for that.

      Hope that helps!

  23. Hi Brian,

    Thanks for your article on raising investor funds. What format do you use to repay the raised funds back to your investors after you have purchased and stabilized the asset? timing and return offered to them?


    • Brian Burke

      Hi Pete! Fund structure varies from offering to offering, but I follow a similar architecture for each of them. Investors get 100% of the cash flow until they reach a specific return (usually 6-8%), then receive a percentage of the cash flow thereafter (usually starting at 70% but oftentimes with a sliding scale that rewards performance of the sponsor).

      I’m looking at most property now as a 10 year hold. It has to pass my underwriting that way, but the reality is that we buy, fix up and reposition the property then either sell or refinance with cash out (to return investor capital)…then hold until the market is best suited for the most advantageous exit. The goal is to maximize investor return.

      Return varies from property to property but I try to target a range that our investors have an appetite to fund. These days that tends to be in the range of 12% to 17% IRR depending on the risk profile and age/location of the property.

  24. Matt McCourry

    Another awesome article Brian! I am taking your advice as we speak, working small duplex deals trying to build my property management and acquisition system. For me raising money is the hardest part, I know it will get easier with each successful deal my company does, but getting the investor to pony up when you actually find a great deal is the hard part. Everybody wants to invest in real estate after they read a book, or a family member or friend tells them fancy get rich quick stories… in our preliminary meetings they are all gun ho, then when a deal actually comes around the excitement is gone? They turn into wishy washy “tire kickers”?? Any tips you have to overcome this? Or are people just like real estate? Interview 100 potential investors, take 10 of them seriously, and then become a partner with 1??

    Thanks again for another awesome article!


    • Brian Burke

      One thing you will see a lot, Matt, is that an investor’s interest in a deal gets weaker the closer it is to check-writing time. If the prospects that you are talking to are excited about real estate because they read a book or went to a seminar, they aren’t likely the right investors for you. Sophisticated investors make calculated investment allocation decisions and are seeking opportunities that are in line with their objectives. This is a sharp contrast from someone that is excited about real estate just because of a book or seminar. Your business will grow when you have sophisticated investors aligned with you. And yes, you will subscribe a lot fewer investors than you will pitch. Raising money isn’t easy, but then again nothing worth doing is easy!

  25. David White

    Thanks for writing this article. I was expecting some magical way of how you were able to raise the money. Instead the mantra of “hard work pays off” proved to be true. Not only that but building trust. Very inspirational story.

  26. regis possino

    I’m coming from the world of investment banking and have raised million over the years for public companies and such.
    I’ve done a smattering of real estate deals for myself over the years and have been generally pretty successful, but it was a part time thing.
    I’m now retired, and decided that my next business incarnation was to be as a real estate mogul.
    I dont have an interest in flipping smaler properties, such as houses. Im more interested in larger office complexes.
    It seems that your advice is the same, but the project much larger. If I have a few office building s that I found in a bankruptcy ( which I do ) what do you suggest is the best way to buy them as a portfilio property, or as a flip to a larger buyer such as a hedge fund or a trust?
    I’m currently evaluating the income, but so far they seem to be quite impressive in that they all cash flow positive.
    Any thoughts would be appreciated.
    Regis P

    • Brian Burke

      Hello Regis,

      In my view the process of raising money is the same whether you are raising $20,000 for a flip or $2 million for an office project–it’s all about finding sources of capital and earning the trust of those sources so that they will invest in your offering.

      Thus, if you have experience in doing large office projects and you have a track record that you can show potential sources of capital (and you have an audience of capital sources that are even willing to look) then you are in a good spot. If this is your first attempt at an office project, you can dive back to your other successes and show that track record. If your previous projects somehow translate, it can work. But, if the substance of your earlier track record doesn’t directly translate into the business of owning and operating office buildings it probably won’t be helpful. If you have sources of capital that are friends they might invest with you because you are friends, but if they aren’t friends they’ll want to see that you know what you are doing before they part with their hard earned dollars.

      If you can’t find the investors to fund it because of lack of track record, you could try partnering with an experienced office investor. You take a piece of the deal for finding it and the experienced partner raises the money by leveraging their track record. You then shadow them in the operations and management and turn the project into a success, which can form the basis for YOUR track record when the next deal comes along.

      That’s my $0.02, hope it’s worth at least that much. 🙂

        • Brian Burke

          I can’t answer that, Ameer. Just like any engagement for legal services it is a function of the billable rate for that particular attorney and how many hours it will take to complete the offering. The complexity of the offering has a lot to do with the time required and will directly effect the bill. I pay between $10K and $20K per offering but these are repeats of the same basic set of documents. I’ve been quoted as much as $50K and as low as $10K so you really have to be specific about what you want and shop around. Some law firms will do a flat fee and others will charge strictly by the hour. It isn’t cheap but it’s a part of doing business and you can’t go without it.

  27. Diedrick Nagle

    “As you grow, you will build your team. Until you reach a certain scale, you can’t support a full-time staff, so you’ll have to do the work yourself. Don’t try doing this from the beach, and forget about the four-hour workweek. You have to put in the time and the effort or it simply won’t happen.”

    ^^This right here is invaluable. Thank you for the much need re-reality check. It’s reassuring really…to know that the obstacle is the way and that 4 hour workweek is only a myth in the beginning (Not to discount Paretos Principle of course)

    Thanks for endowing this newbie with another dollop of knowledge.

  28. Michael Belden

    How are you structuring deals with your investors? Do you have a 2/20 fee structure in place similar the way a private equity firm is structured? Or do you continuously give out more equity the more money you raise? Does that equity remain consistent for cash flow of properties and sale of properties? For example if you own 20% of a property that generates 100k, are you getting 20k as well as 20k of the profits upon sale of the property? Thanks!

    • Brian Burke

      Deal structure varies from one offering to the next. Generally speaking it’s a preferred return (investor gets 100% of the profits until they’ve earned a specified return) followed by a split of the profits. That split typically starts at 70% to 80%, and declines as specific performance hurdles are met. An example might be an 8% preferred return, followed by 70% of the profits until reaching a 12% return, followed by 60% of the profits until reaching a 15% return, followed by 50% of the profits thereafter. But again, it varies to some degree based on forecasted performance. The objective is to provide a marketable risk-adjusted return to the investor and that can cause the waterfall to slide in one direction or the other in order to achieve it. Sometimes you have to give away more of the deal to hit a marketable return, and some deals have plenty of room for the sponsor to participate in a greater way and still produce a return that attracts investors.

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