I've been lucky enough to get a spot in a good firm doing real estate investment management and I can't think of a reason that I would want to leave. However, I've always been interested in starting my own business and I was thinking I'd like to start my own development company or real estate fund in the future, after I've cut my teeth and developed my rolodex.
Does anyone here know someone (or themselves) who has their own development company or investment fund? How do these two businesses compare in general? And do you think this will be a good industry to get into going forward or is there any fundamental shift threatening its profitability?
I know these are broad but I am just curious since I don't know any developers/GP investors myself. I'll probably try to find myself a mentor that I would like to emulate but I just want to know some info to get started.
To give you an idea, I am thinking maybe get involved in urban multifamily or office assets. I'd like to either be developing or redeveloping for the most part. obviously this might change by the time I actually do this but just for an idea now.
Thanks
Sure, you could put together a small development deal on the side, if you know about site selection, have enough experience, are lucky, etc.
You can't really just "start your own fund" on the side. What a newbie might do is buy a deal on the side with other people's money and a loan. Then maybe do another, then another, etc. But the guys who have the ability to raise a discretionary fund?? ... let's just say they've been around the block a few times. Be realistic here.
In either case, it's all about getting the money. Good luck with that shit.
What are you doing working in this industry if you have doubts about the future of real estate?Would love to hear why you think that is a 'newbie' move?
Had a friend recent take out a $10k car loan to fund a 90/10 structured multifam acquisition. It was his first "personal" deal. His comment was meant to illustrate a situation such as that I believe.
Would love to hear more about this. How many units? What market? Yeild on cost? Capex plans? Lender?
It was a unique situation. It is a 6 unit deal in a very small hometown market. He knew the owners family. They were trying to offload assets before before the dad passed away. Got a killer deal. He is negative cash flowing right now and had to put in some money to fix up the roof but the has a friend who is a local property manager so the deal is completely hands off for him. It is an equity buildup deal as he has a lot of family in the market and will always be tied to the place so he plans on holding it for a long, long time. He has a good salary and can cover any near term deficits for a while.
There are still killer deals to be found in very small markets, especially in the multifam market if you want to do it on the side. 2 - 6 unit buildings are routinely selling for $25k/door and will require little to no supervision with the right management company. I think someone was talking about this either in this thread or another one. Said he was consistently buying 2- 4's that he has never even seen in person.
I was referring to the small investment firms when I was talking about any fundamental shift. I think institutional is fine. In fact institutional might be something threatening the smaller independents. Just curious if anyone has an ear to the ground
And I don't mean now. I mean as kind of a later-career exit opp. I love where I am now but I've always wanted to start a small business and retire from that when I'm older. Just wondering if this is realistic
Interesting. My group pays out in Feb so I'm starting to think about cash placement. $25k a door is certainly attractive if you understand the market. Like you said though, property management is key. The value proposition looks a lot worse if it starts sucking up your time.
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