We are entering a new chapter with our properties. Because of this growth, I have had a lot of people reach out to me recently. They want to invest in the next big thing we do.
Up until now, I have bootstrapped everything. I have never raised money before. To be honest, I would feel a lot worse losing other people’s money than losing my own. Because of that, I want to be extra careful. I need to make sure I know exactly what I am doing before I take a single dollar.
Table of Contents
The Playbook
I have been reading a book called Investing in Real Estate Private Equity by Sean Cook. I actually found this recommendation through a tweet by Moses Kagan. He is a big real estate guy in LA that I follow.
This book is teaching me the standard for how to raise money for these kinds of deals. It provides a formula and a framework. It helps me understand how to pencil a deal, value it properly, and present it to people in the right way. It breaks down the game for both the sponsor and the investor.
Assessing Risk
When it is my own money, I can be a little more risky. I have belief in myself. But that belief only goes so far with other people.
I need to be able to tell the story of what is going to happen with their money accurately. I need to let them know what they can expect. This book is teaching me how to look at things from a technical standpoint. It helps me assess risk and take out variables to protect the investors.
My Unique Offer
The way my businesses work together is unique. I control both sides.
Investors would have the opportunity to invest not only in the real estate but also in the concept that is going on the real estate. They can pick one or the other, or they can pick both. That is an interesting thing I offer that other people do not.
Conclusion
This is my testing ground. I am learning a lot about the real world application of development. It is very relationship-based. By using this book as a guide, I am building a new part of my business. I am creating a list of potential investors for when the time is right.
If you are interested in seeing how we structure these future projects, or just want to follow along as we expand, keep an eye on this space.
If you are interested in potentially investing in our future projects, send me a message and let’s chat.