Do REPEs also hold properties or do they always sell them?
I have always wanted to start my own RE firm in which I acquire/develop and then hold those properties and generate returns to my LPs with the cash flow from the properties without having to sell them. Is this possible or do REPE firms only sell the properties once they’re fixed/developed? If it’s not possible, should I consider going the REIT/REOC path instead?
Yes, of course. The more interesting strategies are the ones that short real estate and make money when properties fall in value
Thank you for your answer!
Lol
Yes. They do. It just depends on how they structure their capital. Not every owner is a real estate private equity fund. I work for a developer. We get paid via promote so we want to sell. But we are also operators. So when we sell we generally stay in the deal and JV with the next buyer. This is a ‘hold forever strategy.’ Insurance companies generally hold forever. Local developers many times hold forever. It’s just how do you structure your capital raise - you can’t bring in short term capital.
Thank you for the reply. Do you have knowledge on what books should I be reading that could help me gain knowledge to start my REPE career in the future?
Wow...we always get the typical "I want to start my own REPE/development shop," but this is the first time I've seen someone consider starting a REIT. I think you should go the REIT path purely just to avoid competition with all the monkeys planning on opening their own REPE shop on here. Also, if you never plan on selling, then you're going to need to raise a lot more capital considering you never recycle your proceeds. REIT's are better vehicles for raising more capital since you have better access to public markets and sell shares.
Thank you for your answer! And I will definitely take a look at it. REITs seem to fit my investment criteria the most. I want to drive past buildings and say “That building right there, I own it” and not say “Ah yes, I sold that building”.
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