Are you an aspiring apartment syndicator looking to raise equity for your first multifamily deal? I know how daunting it can be to secure equity for your first deal especially when you, and the potential investors, know you just don’t have the track record, yet. However, with the right approach and strategies, it is possible to raise the necessary funds to get your first multifamily deal closed.
In this article, I will share my experience on how I managed to raise 1 million dollars for my first deal.
Here are some tips that could help you too:
1. Leverage The Track Record Of A Mentor
When approaching potential investors, it can be helpful to leverage the track record of a mentor. If you have a mentor who has successfully completed similar deals, you can point to their success as evidence of your own potential. You could also consider partnering with a more experienced investor who can provide guidance throughout the process. This is exactly what I did in the beginning by having a mentor, who at the time had about $100MM Asset Under Management (AUM).
2. Create A Big Company Aura
At first glance, the sentence above may leave you feeling confused and unsure. I agree that it is not immediately clear. However, I will never forget what my father-in-law said when he saw the newly launched Dwellynn website. He exclaimed, "Wow, this looks like a big company!" This initial impression is crucial. Potential partners, investors, and lenders who visit your site for the first time should feel the same way. It is important to pay attention to every detail. Perception is reality, so make sure to appear big from the get-go. And when reaching out to stakeholders, avoid using an email address with "@gmail.com" at the end.
More to come about this in the Apps and Software we use at Dwellynn module.
3. Build a Strong Network
Now that you have created a “big company” aura, it is time to go out with confidence into the world. Networking is crucial when it comes to finding equity for your first multifamily deal. You need to build a strong network of passive investors, mentors, and partners who can help you fund your next deal. Attend real estate conferences, events, join business associations, and participate in online forums such as BiggerPockets, LinkedIn or even Instagram to expand your network.
Personally, this is where I was able to find my partners who were out-of-state but needed a boots on the ground partner in Texas and someone who can find good assets, control the deal, and take it to closing. This is how I did it.
In conclusion, raising equity for your first deal can be challenging, but not impossible. By adding your mentor’s track record to your team’s section on your website, creating a professional look for potential stakeholders, and continually building a strong network.
That classic, though corny, line of Your Network is your Net Worth is true!
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.