March 19, 2008

Real Estate Syndication Questions & Answers: Part 5

As we prepare for our seminar program that covers the concepts of successful syndication, many people are sending in questions that they have about the topic. We are organizing them into categories and I am answering them so that everyone who is interested in learning how to make money the same way that Wall Street makes money, can begin to understand how the business works.

In the coming weeks, I will continue to answer the real estate questions that come in using our Wednesday column. Feel free to submit your own questions as well. To register for our upcoming live event, go to www.SyndicateFast.com. To submit a question of your own, go to www.joelblock.com/capital.

More Questions about Real Estate Syndication

How do you find and get your deal in front of accredited investors, especially for your first deal?
The most important component for any investor is confidence in the syndicator that they are placing their capital with. Part of the reason that it’s important to have background in either real estate or capital, is because with that background comes experience, and you can leverage that experience into a confidence-building discussion with your prospective investors. There are billions of individuals who have capital and are looking to place that capital into deals if the deal is a good one. First, they have to have confidence in you, second, they have to have confidence in the deal, and that’s the reason that your real estate expertise is so critical in this formula. There’s no shortage of capital from individual accredited investors, as well as from the hedge funds on Wall Street that pool billions and billions of dollars and are ready to make investments in deals.
I know where the deals are; I just don’t have any credit. How do I get investors?
If you’re a real estate expert and you know where the deals are, and you’re able to find a deal, whether you have excellent or poor credit, you need to find a partner who has complementary skills to those that you have. A significant part of our program is about putting people with complementary skills together. I recognize complementary skills when I see them, and I want you to be able to recognize what your strengths and weaknesses are, so you can find other people who can fill in the gaps where your weaknesses are. There’s no harm or shame in admitting your weaknesses. In fact, great strength comes from acknowledging where your weaknesses are, because it enables you to fill in the gaps with other people who can collaborate with you, who bring different kinds of skills to the table.
Where are the funding sources for lending products?
Lending products for successful real estate syndications are available through all of the traditional channels. Banks and real estate lenders are the best providers for these products, but depending on the circumstances, and depending on the nature of the collateral, hard-money lenders might be the way to go. There are many hedge funds in New York and in other places that have tremendous pools of capital that are available for you to tap into. If you do not know how to access these pools, I’m happy to make introductions and recommendations. However, I reserve these for people whom I know well, and for people who come through my programs, because these are prized contacts that I do not want to waste on people who are under-prepared to speak with them in the most sophisticated way.
Where do you get investors?
This is the hardest part of the real estate game. If you don’t have investors, no matter how great the real estate is that you find, you are going to have a difficult time getting the job done. The best way to accumulate investors is to start small, deal with people you know, and grow your investment opportunities as you succeed and begin to develop an investor pool. There really is a lot of money out in the marketplace, and if you have a great deal, there is always somebody who has the money to fund it. You may have to partner or you may have to share, but the money is out there. So, you never really have to worry that you are going to pass up an opportunity. If you find such an opportunity, call my office and we will talk with you about how to get the job done.

All this material and a lot more will be addressed at our live seminar in April called “How to Raise Money for Real Estate: Harnessing the Power of Syndication.” If you are a real estate professional or someone who is involved on the capital side either as an investor or facilitator, then this incredible two-day event is for you. For more information, go to: www.syndicatefast.com.

About Joel G. Block

Well known in the business community, Joel Block is a best selling author, speaker, and business strategist. Frequently a principal in his transactions, Joel has raised tens of millions of equity dollars for his ventures, which have included real estate syndications and privately held businesses.

Joel’s career is highlighted by the launch of a financial publishing company which he grew nationwide and later sold to the Los Angeles Times. More recently, Joel works with scientists, engineers, technologists and others to help them optimize their entrepreneurial opportunities. Would you like to get a private phone consultation with Joel? Visit www.joelblock.com/capital for details.

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