Anyone know any LPs writing smaller checks?
Working with a group that owns limited service hotels. Small portfolio, but they focus on $7-$10M transactions. Typically they do 70% LTV. Almost all their deals have been personal money, but they're looking to do their first LP raise. Probably just like a $2M check or something. They'd like to contribute at least 15% of the total equity and will guarantee the loan. Typical project level IRR is going to be greater than 20%. I know it may not be super attractive to some and honestly dont know any LPs that are even interested in deals that small.
Know a few GPs who do syndications and they typically ask $50k minimum investment for those size deals (in the multifamily space). They told me if they have a personal connection that still wants to get in and doesn't have the money, they'll waive the minimum and let you put in $25k
With a $2mil equity check, why not go the friends / family / country club money route? The terms are generally awesome (for the GP) when you do a club deal like that
Or are you using “personal money” interchangeably with country club money
I dont think they know any individuals for the "country club" type deals. As for friends and family, they are family owned. I dont know if they have access to family members that can drop down that capital. I can ask them, but I think they are looking for a relationship with an equity source.
PM me.
I would get in touch with family offices, I work for one and we LP a ton of deals with checks being anywhere from 1mm to 10-15mm. I can't speak for all family offices, but our strategy/structure gives us a greater level of flexibility in terms of investment size and deal type.
Interested to hear more about what family offices look for with regards to return and structure. Strick LP investing with a hurdle and then split? Or do they also look to grab some of the GP?
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