Real estate capital raising and syndication
How do I build an investor list for real estate deals?
Short answer
Start with people who already invest in deals like yours, then record what each one wants. Meet investors in person or online, ask about their mandate, and note check size, location and strategy. A short list of real fits beats a long list of names. Many sponsors talk to a securities attorney before they contact anyone about a specific offering.
Collect mandates, not just names
I tell people to stop collecting names and start collecting mandates. A mandate is what an investor wants to buy right now. It covers asset type, market, deal size and timing. A name with no mandate is just a contact.
At our events we hear mandates all day. One investor says they want value add multifamily and covered land plays in one city. Another wants commercial real estate plus private equity. Another is putting capital into multifamily units and development projects. Each of those tells you exactly which deals to send and which to hold back.
This clip plays a series of real investor mandates, including several for real estate and multifamily.
"We weren't here an hour and then I met a gentleman who wants to put money into my fund at the tune of about $5 million."
Where the first names come from
Begin with people who already know you. Past investors, lenders, brokers, attorneys and other sponsors all know someone who writes checks. Ask each of them who might fit your deal type, and ask for an introduction rather than a phone number.
Then go where investors gather to place capital, not to raise it. At other events almost everyone is raising money. At ours, investors attend to place capital, so you meet a different mix of people.
One note on outreach. Rules around advertising an offering and reaching out to investors can differ depending on how a deal is set up, so many sponsors talk to a securities attorney about how to approach this.
What to write down for every investor
A spreadsheet is enough to start. Add a row the day you meet someone and fill in these fields:
- Asset types they buy, such as multifamily, land or development
- Markets and countries they prefer
- Typical check size and any amount they want to place soon
- Where you met and who introduced you
- Their last reply and the next step
Update it after every conversation. A list that is six months old is mostly guesses.
Give them a reason to pick your deal
I have found that investors who can see deals first, exclusively, or at a better valuation have a real advantage. If you also bring strategic value, such as domain expertise, investors are often more interested in your capital. The same applies to you as a sponsor. Investors on your list want to feel they see your deals early and get something others do not.
I talk here about why investors who see deals first and add strategic value get chosen as partners.
Relationships also take time. One guest in that video said the right partnership was built over quite a long period. Expect the same with investors. Add value before you ask for money.
Vet each name before you rely on it
Do a basic background check on every serious name. At Family Office Club we built a tool for instant due diligence on a person, which checks their name against terms like fraud, conviction and banned from industry. We also built an underwriting tool that stress tests real estate deals for cap rate changes, cost overruns and interest rate moves. Check both sides. Know who is on your list, and make sure your deal holds up when they ask hard questions.
This forum walks through the due diligence and real estate underwriting tools we use.
Summary and key takeaways from this video
What I have said on this at our events
Real estate is a good place to build a list because wealthy families already own a lot of it. In the families I work with, usually 20 to 35 percent of net worth sits in real estate, sometimes as much as 40 percent. The average family I work with puts about 20 percent into real estate development and 80 percent into cash flowing real estate. So when you record a mandate, note which side the investor favors. A development deal and a stabilized income deal go to different people on your list, even when both are in the same city.
"Usually it's 20 to 35 percent, sometimes as much as 40% of their net worth is in real estate. The average family I work with puts about 20% into real estate development and 80% into cash flowing real estate."
"So how could you build a database of the 280 dry cleaners, or the 800 stem cell companies, or the 52 pieces of real estate in your niche? You know, suburbs of whatever real estate space you're looking at and build a database of that universe so you can get their contact details, figure out the asset owner, and then work that list system."
Facts from this talk
- Family Office Club's investor mandates video draws on a network of more than 7,500 investors.
- One investor in the video said they had about 10 million to place within 30 days into multifamily deals in Seattle.
- Vetty is a real estate deal analyst that stress tests cap rates, cost overruns, interest rates and occupancy levels where the NOI would go negative.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Investment Opportunities: Investor Mandates from the Family Office Club’s 7,500+ Investors, Family Office Live Forum: Capital Raising, AI Tools & Investor Feedback (with Richard C. Wilson), How This Family Office Invested in 300 Startups & Built a Town for AI. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around offering outreach rules, investor verification and general solicitation. Do not use AI to write your own legal agreements.
What to do next
- Write a one paragraph description of your deal type, size and market.
- List ten people you know who could introduce you to investors who fit.
- Create a sheet with columns for asset type, market, check size, source and next step.
- Meet investors where they come to place capital and ask each one for their mandate.
- Run a basic background check on each serious name and consider talking to a securities attorney about how to approach outreach.
Follow-up questions
Should I buy an investor list?
I would be careful. Bought lists rarely include mandates. Many sponsors also talk to a securities attorney before using one.
How big should my first list be?
Start small and focused on investors who fit your exact deal type and size. You can add names as you learn who responds.
How often should I update the list?
Update it after every conversation. Mandates change, so check in regularly to confirm what each investor wants now.
Related questions
- What is a capital stack in commercial real estate?A capital stack is the full set of money that pays for a commercial property, ranked by who gets repaid first.
- How do I raise capital for a self-storage acquisition?Find the property first, then raise the equity against it.
- How do I find passive investors for syndication deals?Start by putting out useful content so passive investors come to you, then double down on what gets the strongest response.
- What happens to investors when a syndication deal goes bad?When a syndication goes bad, distributions usually stop first.
Work through it with the waterfall calculator. See all real estate capital raising and syndication resources.