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A big concern for new real estate investors is the question of how to raise financing and build capital. Many investors are intimidated by traditional methods; using institutional debt-equity options and financing. Many who are hesitant about financing are unaware of alternative financing options. We have discussed alternative financing previously on the show, but this episode focuses on a specific method: syndicating real estate.
Jefferson Lilly also has a special focus when it comes to real estate investing. Jefferson specializes exclusively in mobile-home park property markets. Through his own company, Lilly & Company as well as through his co-partnership with Park Street Partners, Jefferson owns and manages 10 mobile-home parks from Wyoming to Ohio. Park Street Partners specializes in syndicating real estate deals, operating through a registered blind fund as opposed to raising financing through singular deals.
Things to Know About Syndicating Real Estate:
- “Fundraising takes a life of its own”
- Reputation and word-of-mouth marketing produces a snowball effect in syndicating real estate
- More successfully executed deals translates to a greater willingness from investors to devote capital
- Costs
- Roughly $7500 to establish offering memorandum template in syndicating
- Roughly equivalent in legal costs per deal for one-off financing
- Syndicating
- Blind funds- investors pool capital and allow broker/agent to make executive investment decisions
- Largely adaptive to outsourcing options for financing and fundraising
- Investors may conduct due diligence on broker/agents existing transaction records
- Stipulations to Syndicating Real Estate
- SEC requires strict operating stipulations for funds
- Accredited investors permitted only
- Private net-worth of $1,000,000 excluding home
- Annual income of $200,000 (Individual)
- Annual income of $300,000 (Married)
- Advice
- Due diligence is key
- Generate customized contracts, tailored to specific investment goals
- Provide enough time for both parties to process deal requirements
- Seek guidance from a mentor
Jefferson Lilly got his start just like any other investor. He sought tools and resources to become informed in his market type. Some of Jefferson’s key mentors and resources are:
and
George Allen – Mobile-home park industry specialist, author of How to Find, Buy, Manage and Sell a Manufactured Home Community
To contact Jefferson with any questions regarding mobile-home park investing or syndicating real estate, contact him by email at jefferson@parkstreetpartners.net
For any other Investment opportunities with Jefferson’s company, join the mailing list on the company’s website: www.parkstreetpartners.com or join the LinkedIn group: Mobile Home Park Investors