How much do you expect a Co-GP to coinvest if limited funds?

I have great experience in a specific market and looking to put together a couple deals. I have some potential co-gp investors who are interested in the deals, but I have limited funds.
 

Is sweat equity a real thing? What would you expect a co-gp running the deal to have liquidity wise, and if a sweat equity sort of thing,  what would be a fair deal structure with them? I would love to make a small fee for putting together these as some are off market, but I also understand that they don't want me to "fee out" of a deal day one.


Most of these deals are existing assets, except for two that are new construction. 


Appreciate any thoughts!

 
Most Helpful

Sweat equity is real! What you’ll want from a co-gp is basically their name/reputation and some liquidity. Most important is their rep. As a co gp I’d imagine it goes like this:

1. You do everything, with some mentorship from co-gp.

2. You make some sweat equity in exchange for doing all the work. They make a great deal of the GP return for putting their name and rep on the line for you.

 

Sure thing. It will vary significantly, but id imagine there is a singular GP vehicle, and you and the co-gp have an agreement as to ownership. I.E. you’re 10-20% of the GP, they front all the capital and they’re diluted.

I think this can be heavily varied from place to place. It’s probably most important to understand what each potential investor needs, and their contribution and approach it from a nuanced perspective- this includes understanding the value you’re contributing and bringing to the table as well!

 
StabilizedYOC

how do up and coming GPs do some many deals (I know a few groups) with each deal requiring a good amount of equity as a GP? any creative structure for them to not run out of money? 

A wealthy co-GP and creative arrangements with equity and/or contractors  

Commercial Real Estate Developer
 

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