I’m looking to start a real estate investment management company. We would buy residential and commercial REOs to rent. Hopefully getting in on the rental sacked security market.
Anyway, how far along would I have to be for YOU to be comfortable investing in me?
I have two board members. One with 25+ years experience in real estate valuation, and another member with impressive development, contractor, and property management experience. I will be able to buy, fix, and rent out about 3 properties before I need to look for capital to expand.
let me now rephrase the question: Would you be willing to invest in my company at this “three house” point if…
your note was backed by actual real estate
I had all three houses rented out IMMMEDIATELY-- due to superior space market analysis techniques
all of your other due diligence checks out
basically, would you POSSIBLY invest in this situation?
I’m trying to gauge how hard raising capital will be in this situation.
The first thing any potential investor will want to see is your track record. What are the composite realized returns of deals you/your company principals have done in the past? Not deals where you helped run the market analysis, or where one of your guys was the contractor, but deals where one of you was the person running the acquisition, asset management and disposition. You need someone with a track record or you have zero shot outside of friends & family money. If you can demonstrate a successful round-trip strategy with your 3 properties, that would be a decent starting point for other investors. I think you’d have to prove out the strategy before anyone will consider giving you money.
I assume your talking about private money and not institutional.
I’m trying to get up to REIT status, preferably an UPREIT which allows the persons we acquire property from to avoid capital gains tax on their sales. Unfortunately It will take 1-3 years to reach that status.
As for investors, I believe RBSs would be interest and only subject to interest income taxes.
The biggest hurdle I see you facing is trust. You need to find a way to have your project tied to a trusted corporate name before anyone will give you a dollar. The only way around that is to wholesale your investment units to financial advisory firms after they have done enough due diligence to add you to their platform of approved investments.
Thank you very much. This is just the kind of advice I was wanted. I’m open to criticism. This was even better though, as it’s constructive.
What you suggest is possible. After reading the article below, which suggests the occurrince of what you’re suggesting, do you have any speculation on how to execute the strategy? (I know I should be paying for this lol, but I really do appreciate all input)