Real estate capital raising and syndication
How do I find passive investors for syndication deals?
Short answer
Start by putting out useful content so passive investors come to you, then double down on what gets the strongest response. Pair that with real relationships with other sponsors, vendors and partners. Ask what investors want before you design the deal. Then push your best content to the exact type of investor who fits. Many sponsors talk to a securities attorney about their offering.
Let investors come to you first
Most sponsors start by chasing names. I think it works better to start by giving something away. At Family Office Club we call this pull marketing. You put out useful material and investors move toward you on their own.
Try about 20 assets. They can be articles, short videos, webinars or a guide. Then watch which one or two get the strongest response. Ask why those landed. Make 20 more like them.
"Pull marketing is putting out value, and it pulls investors into your funnel."
This session walks through how to move from pull marketing to push marketing, with a live example of a sponsor who used a book to attract passive investors.
Summary and key takeaways from this video
Then push the winners at the right people
Once you know your best piece, push it. Define who invests in your kind of deal. That might be a job title, a company size and the cities where you buy. Target that group on LinkedIn and gather more people who fit. Mail your book or guide to your top 300 prospects. Reach them on more than one platform.
One guest on that webinar wrote a book to warn people about bad operators after a friend lost her savings in a passive syndication. Investors started reading it and asking to invest. Some sponsors even told their own investors to read it. The book was meant to help people first. That is why it earned trust.
Build relationships before you need the money
Many of the best passive investors come through people you already know. In one panel, an operator said their deal flow came from general partners and vendors they had worked with before. Some of those people also had family office portfolios of their own.
I tell first-time capital raisers the same thing. Many investors and family offices are not looking for one-off deals. They want partners they can grow with. It is a bit like dating.
In this panel, operators and family office investors explain how they find deals and partners through long-standing relationships.
Summary and key takeaways from this video
Offer what they want, not what you need
One speaker on a podcast told a story from the 2008 and 2009 period. Banks had stopped lending, so they put together a debt syndication. They raised only $25,000. Their investors wanted equity. The lesson was to give investors what they want, not what you need.
Also know the environment. Passive investors have taken real losses lately. Some have had distributions cut and some have lost money. They will ask harder questions, so expect more diligence and prepare for it.
Many sponsors talk to a securities attorney about how their outreach and advertising fit their offering.
What I have said on this at our events
Expect a lot of no's before you get your yeses. Some experienced raisers say they approach 300 plus investors to find the 10 or 15 who will invest, or a thousand to find two or three dozen. Also remember that the bigger check writers are often more sophisticated, and they may see thousands of deals a year. Many sponsors think their deal is better than it really is. So if raising is slow, you are not alone, and it helps to be honest about how your deal compares.
"They still, after that many years, approach 300 plus investors to find the 10 or 15 that will invest, or they will approach a thousand to find the two or three dozen that will invest. So if you're having a hard time raising capital, first of all, almost everybody is in this economy."
"And one core issue with capital raising is a lot of people think they have better deals than they really have. The problem is that some investors are very sophisticated. Some are not, of course. There's a full spectrum, but the very sophisticated investors usually are the bigger checkwriters. They see thousands of deals a year."
On the record
- The pull and push marketing method suggests creating about 20 assets, finding the one or two best, and mailing a book to the top 300 prospects.
- One speaker raised only $25,000 on a debt syndication because their investors wanted equity.
- One operator on the panel has done over $2 billion of real estate acquisitions and sources deals through past vendors and general partners.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Family Office Club Hot Seat Webinar Featuring Live Strategy Sessions with Investors & Founders, Top 3 Insights on Structuring Investments - PODCAST - Family Offices & Family Office Club, Growth Focus Finder: How Investors & Family Offices Leverage NextGen, Roots & Models to Scale. 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 outreach and advertising rules, offering structure and investor eligibility rules. Do not use AI to write your own legal agreements.
What to do next
- 1List 20 pieces of useful content you can publish about your market and your deals.
- 2Track which one or two get the strongest response from investors.
- 3Define your ideal passive investor by job title, company size and location.
- 4Reach out to past partners, vendors and other sponsors for introductions.
- 5Many sponsors talk to a securities attorney about their outreach before they send anything.
More questions on this
Should I advertise my syndication publicly?
Many sponsors talk to a securities attorney about public advertising and how it fits their offering.
Is a book a good way to attract passive investors?
It worked for one guest on our webinar. The book was written to help people avoid bad operators, and readers then asked to invest. Write it to help, not to sell.
What if investors do not want the type of deal I offer?
Ask them what they want to own. One speaker raised only $25,000 on a debt deal because their investors wanted equity. Only offer what you would invest in yourself.
Related questions
- How do I build an investor list for real estate deals?Start with people who already invest in deals like yours, then record what each one wants.
- What is a preferred return in a real estate syndication?A preferred return is a stated annual return, often quoted as a percentage like 8%, that investors in a syndication get paid before the sponsor shares in profits.
- How do I raise capital for build-to-rent communities?Start with the exit.
- How do I raise capital for a self-storage acquisition?Find the property first, then raise the equity against it.
Work through it with the data room checklist. See all real estate capital raising and syndication resources.