Curious if any RE entrepreneurs on here have any experience with doing opportunistic deals with very little personal capital (or even no capital) and what capital raising has looked liked for that?
I can imagine the first few deals you do is next to impossible but love to hear some stories.
It'll be tough to get funding with no skin in the game. The only way I can see this happening is to partner with somebody who has cash and fancies themselves a Developer/GP but has no skillset to actually execute.
Basically pair them up with a solid GC and/or act as that solid GC?
How would you go about taking down equity in the deal in that situation with little to no money in the deal but providing the operational and project management support as the "GC"?
You aren't going to GC unless you are in fact a GC. You will basically have to go find a deal, put it under contract, and then hit up all the rich people you know who don't actually know shit about real estate but want to invest directly. Site control and a slam dunk strategy to boost NOI such as a credit tenant ready to sign a 10 year lease are pretty much the only way you can do this. I would highly recommend against trying to pull this off unless you have a great deal of experience, otherwise you bring no value to the table. Nobody gives a shit about your "operational and project management" experience you have outside real estate.
What would that pairing look like from a partnership perspective?
It happens but only when you have a solid track record first, which means you've had skin in the game before.
This is a broad subject. Are you referring to real estate development or acquisitions?
Honestly...most people need to change their mindsets. Don't focus or think about making money. Think about how you can provide value to someone. And that can give you a path to making money. Stop looking for a golden egg that doesn't exist.
Getting back to your question...there's a vast amount of literature out there from self-anointed gurus who offer strategies for the gullible on how to do deals without any money.
What would this path hypothetically look like?
Find off market / undervalued deals and act as an advisor to those who are actually in a position to buy/develop ?
I agree. All about value creation. If you can bring something truly unique to the table (sourcing off market deals, connections getting a certain property entitled and permitted, etc) you should be able to set it up. Focus on the value creation and bring in a financing partner that you know and trust well. Focus on a market where with the combination of these two you'll actually be able to close deals at given price points.
It's possible, just not likely.
I've gotten to know an investor who's story blows me away every time I think about it. This guy was in a dead-end job 12 years ago, and saw an ad on TV at 2am for a real estate guru. He took the course, flipped a few houses with hard money, and then started buying commercial real estate. He had a few deals tank, then started having some really great success with a string of about a dozen deals over ten years. He's parlayed that experience into developing ~$10M projects entirely with other people's money. Still has basically no real estate finance expertise, just the moxie to keep putting together deals and finding investors.
That's pretty uncommon. The vast majority of small-to-medium real estate deals require the sponsor to contribute a significant chunk of the equity.
I mean this is a great way to do it. I suspect most people on this website will not have the patience for a strategy that requires 10 years to even begin to take off, but if you have some small amount of savings then trying to buy in a lower cost market and go from there.
Really the only other way to do it is work for someone else until you're running individual deals yourself. Then you can go to the market and point to an actual track record. No one is trusting someone wet behind the ears with millions of dollars of some of the riskiest returns possible in a new development project.
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