Ramping Up A REPE Firm
I’m 20, and I want to start a REPE firm
My stats:
Non-Target School Around 3.3 ish GPA No CRE experience (just a certificate from Project Destined, 1 year experience wholesaling homes and currently own a luxury home brokerage firm outside the US)
Only thing I have is:
• Vision, Drive & Ambition • $500 USD in savings (Expected to increase due to luxury property sale) • And a US Passport
I think the smartest way for me to start my firm is to get certifications (like A.CRE, REFAI), work as an analyst, slightly climb the corporate ladder, and work my way from there. I’m currently focusing on financial modeling (Equity Waterfall Models, ProFormas, DCFs, IRR projection, Cash Flow Statements, etc) and also learning about fund structures & capital raising (Debt & Equity)
I love CRE, I’m very passionate about this business. But I don’t see myself being behind the scenes the whole time working at a firm, I want to be a capital allocator, a fund manager, a GP, an operator. And most importantly, I want to be my own boss (Which is possible since the beauty about CRE is that it is such an entrepreneurial industry in which you can start your own company and not having to be attached to being an employee for the rest of your life)
I’m open to hear your insights, and I’d agree with you if you were to call me crazy or delusional (lol)
You need at least $300 more dollars
jesus.
well ... shvo did it. right?
not at your age of course
Very true, Shvo is a phenomenal player in this business
Getting the money is the hardest part, the rest can be done by going on LoopNet it’s really not as hard as some people try and make it. Focus on building your own cash pile and starting off small. In a couple years after working buy one unit here, the next year, one unit there, and make sure all cash generated goes to acquiring more units. After 20 years of focus you will definitely have at least 20 units. In 30 years, that would likely be 100. Compounding is KEY. Warren Buffet made 99% of his money after he turned 65. Good luck dawg, you will be successful if you keep at it.
Thank you so much man. How much cash approximately would you say I should be saving at the moment? I appreciate the motivation.
I currently aim to register the LLC legally, the company’s name is quite cool and i don’t want anyone else to take it lol
Mine is a dumb answer but save as much as possible. That first means not going into debt for school. Working a job is also pretty helpful, I work as an RA at my school so I get free housing and $3k per semester. I’m graduating early with zero debt although it’s a close call because I just depleted my education savings account that my mom built up over the years, and I’ll have to literally clear my entire bank account to afford tuition my final semester.
After that, the small things add up. Instead of a $10 meal, get a $7 meal. Over the course of a year that is $1k+ just from going more frugal at one meal. Do that for every meal you’re now at $3k. Even that is enough for a down payment on a studio/1 BR in a bad part of town. Target the largest expenditures though. Go frugal with housing, $200 less per month is $2k+ saved every year, so now we are at $5k saved in one year and I’ve only gone over two very simple examples with housing and food.
Do that for two years and you’re at $10k, definitely enough for a down payment for small one-units in pretty much every major metro in the US. Keep saving like this and on top of gains from new apartment you’ll have your second unit within two years. Keep compounding and there is a decent chance you will have dozens of units in a decade.
A TON of assumptions are being made here but with persistence and discipline it is definitely possible. I’m 21 myself so plz don’t rely on me for financial advice 😭 But this is what I look to do once I’m out of college.
Love the ambition kiddo go get em
Thank you bro, we got this man 🔥🙌💯
I have great respect for people with big dreams and ambition. You got this.
Highly appreciate it man, god bless you
Love the hustle. I raised capital for my first deal at 23 with less than $2k in bank account after pivoting from a completely unrelated field. There was a ton of luck in involved but this is how it went, in case it's helpful.
I noticed that ground up SFHs were flying off the market and wondered what the cost to develop something actually is. After talking to builders in FB groups and construction lenders, it seemed like builders were doubling their equity on each deal. I put together a sh*tty presentation about why, where, and how I could do the same thing but the only missing piece was the capital.
After sending this presentation to about 30+ random strangers in real estate facebook groups, finally someone said they would commit the $50k I needed to buy the land and pay for permits. We'd then use the paid off land as our downpayment for the construction loan. The original structure I proposed was 75/25 in their favor after all capital returned to them.
First project took 50% longer and I had to do a capital call for an additional funds because I didn't know that you had to pay the contractor and then the lender reimburses you (again, no real estate background). Fired the GC halfway through but ultimately got it sold and made that investor money. Ended up doing a total of 9 deals with that investor and dozens with other investors by leveraging the hell out of the fact that I already had one investor (no one wants to be the guinea pig).
It is possible to do it with little of amount of personal capital, but you will basically be working for free on the majority of your early deals. However, now I have the experience to do about 50/50 on most of my current deals.
Hope that helps and best of luck!
Congratulations! That’s such a fantastic thing to be proud of at your age. And thank you for the motivation and the support. Would you be open to hop on a quick call sometime? I’m eager to hear your advice.
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