Naturally, each year new platforms are created by professionals looking to do their own deals, seek out the entrepreneurial path which I believe all of us consider or pursue at one time or another.
That being said, it's always interesting whenever viewing sales comps or seeing closing announcements for decent sized transactions with firms who are relatively new to the game.
Example: Group out of Atlanta called CARROLL. Guessing most of you all in the multifamily sector have heard of these folks, company named after the founder Pat Carroll. Not really sure what his background is, but seems to be a younger guy who just started the firm in the past 5-7 years and has already completed over $5B in total acquisitions. Seems fucking insane. Anyone have any insight into these guys, how the fuck they did it and so quickly?
There are other similar companies formed in the past 5-10 years out there doing 200+ unit deals (Tide Equities, Magnolia Capital, GELT, etc) and I am perhaps just ignorant or naive as to how they are capitalizing these deals, or if they are perhaps simply sliver equity sponsors trying to scale and make money in fees, mgmt, etc?
Group started back in 2008, not in the last 5 years. They've been GP'ing deals with institutional money for a while now and they have an equity fund that they now invest alongside these LPs to gain exposure to more deals. Pat Carroll is a fucking wacko, ask around town if you want to know more. Love some of the folks that work there, others are so so. No doubt they've been succesful and the platform has grown, but I wouldn't ever hitch my own reputation to Pat's.
Magnolia is legit, Max Peek and Will Beam are awesome guys and have been in the business for a while and have a ton of institutional relationships. They've done a bunch of deals with Goldman and now have their JV with Bain Capital (ex-Harvard). They're going places. Will be a great company.
Haven't interacted with GELT, but they've been raising HNW money and their investors keep re-upping. Keith Wasserman is a great twitter follow.
I formally worked for an LP multifamily fund and have actually met with and pursued deals with all of the groups you have mentioned. To answer your question simply, they have the skills to source and get deals under contract, and the capital backing to sign any loan guarantees. As an example, a ~200 unit value-add deal in Arizona might require around ~10mm of equity. These guys will partner with an larger LP group who will come in with $8-9mm, and they have a network of friends and family to fund their GP piece. Of course, they themselves will have to put in a few hundred thousands dollars each. Most of these principals comes from wealthy families to start.
Put even more simply: if you have money and know how to get deals under control, you can easily build a portfolio.
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