Capital Raise For new developer
Any suggestions on the best firm to help raise equity for a RE project? What the traditional cost would be for something like that?
Any suggestions on the best firm to help raise equity for a RE project? What the traditional cost would be for something like that?
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Call it 25-35 million
25-30 million in equity? Maybe don't bite off a $100 MM project as your first rodeo.
Lol.
Thing grew exponentially, wasn't supposed to be near this big...
"Traditional Cost" is too vague.... If you're looking to hire a broker to connect you with an equity player for the JV, the fee would be ~2-3% of the equity raised, so ~$600-900k.
If you're asking what's the preferred return/promote structure might be for the equity partner, those numbers can be anywhere from 6-10% pref with a 20-40% promote to the sponsor. Depends on many factors including, if the property has an operating history, is cash flowing positive, is fully entitled for a complete redevelopment, etc.
Firm to raise equity: Hit up debt and equity brokers. @Merchant_of_Debt" has mentioned his experience with that. Hit him up.
Cost is dependent on deal size. You can build a single family home in Wyoming for $100k, at 65% LTC you need $35,000 in equity. You can build the next Hudson Yards for several billion dollars in total hard costs, which would be a LOT of equity. Where you start is somewhere in the middle, probably skewed down to a few to several million hard costs- a few hundred thousand to a few million in equity required.
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