Deal flow?
Hey chimps,
I'm working on wild idea of mine, create a Fund model and raise money from Institutions. looking for deals that are sub $25 mil in primary & Secondary Markets. searching all the CRE listing sites and Large brokerages I barely finding any listings
some of you who is working with real estate Investment firms can you share some of the tools that you guys use to find the ON/OFF market listings? also what's your #1 deal flow strategy?
Sorry to rain on the parade, but you will never get money from institutions for sub-$25M deals - it's not worth their time to write such a small equity check (even for a fund offering, that asset size is generally not in their mandate), and there is far too much competition and irrationality in the space to appeal to them.
Also if you're not even sure how to locate the deals, you are not ready to raise a fund.
I think this is why his idea is "wild" lol
you got it!
I disagree - I can name a fund who's focus is sub institutional deals in this size range (sub $25MM). Average equity check was sub $7MM. This was a fund with multi hundreds of millions under management. The returns are actually higher in this space as most institutions won't play here and the HNW individuals can't write checks this large. Due to this it's kind of a lost middle.
Sorry I'm not following - most institutions won't play in this space as you said, so who are you raising money from? This is more of a syndicator's space for groups of HNWI in my experience.
Not to say the returns can't be phenomenal and its not worthwhile, but OP specifically stated he wanted to raise from institutions which is going to be very very tough in that space.
you're right, I'm not ready to raise the fund yet, not even close. I'm still prepping for it.
that's the deal size at property level, overall fund its at least 4+ properties.
CreCanadian sb +1
Adding: Work for someone who is already very successfully (note I said very) doing what you want to do with a long track record. Do your 7-10 years minimum and then pop your head back up and if you can honestly and independently answer your own questions employing your own skill, experience and contacts - (and ideally have a partner/fellow re traveler who fills in/complements your missing skill-sets) - maybe you are ready.
what do you think if I put together an A+ team/Partners and offer a fund that no one else is offering, that no one else is offering fund is my secret sauce and that's what makes me go after it.
Adding to this, even if you were to have the highest bid, without a track record there is an extremely low probability you would be awarded a marketed deal. Brokers are looking to maximize price and assurity of closing, the later of which you would rank low on. You are better off trying to find off market deals and raising money from friends and family.
thanks guys for everyone's Input and insights.
I'm still looking for someone to answer my question.
Wouldn’t this just be a venture fund
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