Real estate capital raising and syndication
How can I raise capital for land development?
Short answer
To raise capital for land development, I start with the structure. Show what you put in, such as the land itself, and look for a larger partner who can lower the amount you need to raise. Consider a joint venture with a family office, and build trust with local investors first. Many sponsors talk to securities counsel about their structure before they approach anyone.
Show what sits in front of the investor's money
Land development asks investors to wait. They want to see that you have skin in the game and a plan they can follow. That is why I tell people to think about structure before they polish the pitch.
Here is an example I gave on a hot seat call. Say the land costs $2 million and it takes $8 million to develop. Sometimes the math works like that as a ratio.
"If you own the land, you could sometimes contribute the land and then put that up as collateral or as risk capital in front of the investor's money."
That changes the conversation. You are no longer asking for all of the money. You are showing what you have already committed.
Lower the number you need to raise
Many people say they need to raise twenty million dollars. I have seen that number shrink a lot when a bigger partner joins. In the webinar clip below, I talk about a renewable energy infrastructure project. A larger partner who gives infrastructure access might cut the raise to six or eight million. That partner might even fund half and let you find the other half.
In this clip, I explain how a strategic partner can shrink the raise and what to expect if you try to raise all the equity.
Summary and key takeaways from this video
Is it realistic to raise 100 percent of the equity on a development? In my experience on commercial development, many sponsors put up about five to ten percent, sometimes a bit more. You can raise all of it, but on a first raise you may give up a lot of the economics to make it work. A co-GP can help you get the raise done. I also point out the bigger risk, which is never reaching the finish line on your first deals. Another route is to go to a sponsor who closes deals like yours all day. You bring the deal, raise part of the capital, and take a percentage that reduces the chance the deal dies.
Change the structure when you hear a no
Some family offices only do their own deals. People assume that ends it. I have heard many times, "We can't work together," and then a different structure gets the deal done.
One option some sponsors explore is a joint venture, where the family office has a bigger say and you run the plan day to day and check it against theirs. Family offices have to source deals from somewhere, and some do pay people who bring them deals. Many people talk to an attorney and a compliance professional about whether and how a sourcing fee could work.
I also get asked how to launch something that looks new when the team has a long track record. A member asked me about a land and new construction fund backed by people with 10 plus years in development and fundraising. My answer was that a clear one-liner is critical and a timeline of that track record is really important.
Build local trust before you need the check
The people closest to you are already up the trust curve. You can move them further along fast. I also point to a real estate development firm where I sit on the board. It has $250 million in assets and three investors. The founder calls potential investors every week, joins four to six relevant events a year, does outreach in the local community, and sets custom terms for investors.
In this clip, Tahir describes a firm that handles land acquisition, entitlements and land development in house, which shows how investors hear a development story.
Be concise when others are long-winded. Use video to introduce yourself. Keep a CRM so your follow-up is systematic. Many sponsors talk to securities counsel about how they approach and communicate with investors.
From the Family Office Club stage
When I talk to families about land and development, I remind sponsors how small the slice is. The average family I work with puts about 20 percent into real estate development and 80 percent into cash flowing real estate. Many private investors hold even less in land or development, and it is usually not the majority of their holdings. So you are competing for a small bucket. That is why I want you to show what you have committed, bring a clear plan, and be ready to explain why your project deserves a place in that 20 percent.
"Usually it's 20 to 35 percent, sometimes as much as 40 percent, of their net worth is in real estate. The average family I work with puts about 20 percent into real estate development and 80 percent into cash flowing real estate."
"For most of the private investors I talked to, they might have 10 or 20 percent in real estate development or land investments, but it's usually not the majority of it."
On the record
- Toss Investments, founded in 2013, reports over 2 million square feet of land development experience and over $320 million in acquisitions.
- Richard says that in his experience many sponsors on commercial real estate development put up about five to ten percent of the equity themselves.
- A real estate development firm Richard advises as a board member has $250 million in assets and three investors, and its founder calls potential investors every week.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Meet the Investors - Then Watch Them Grade 2 Real Pitches Live | Family Office Club, Ultra-Wealthy Investor Q&A Webinar, Capital Raising Hot Seats: Pitch Decks, Structures & Investor Relations with Richard C. Wilson. 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 joint venture structures, sourcing fee arrangements and investor outreach rules. Do not use AI to write your own legal agreements.
Your next steps
- Write down what you contribute, such as land, cash or entitlements, and how it sits in front of investor capital.
- List corporations or partners that would benefit from your project and could reduce the amount you need to raise.
- Draft a one-liner and a timeline of your track record.
- Ask a securities attorney about joint venture, co-GP and sourcing fee structures.
- Start weekly outreach to local investors and keep every contact in a CRM.
More questions on this
Should I raise 100 percent of the equity for a development?
You can, but on a first raise you may give up more of the economics. I would also weigh the risk of never getting the deal to the finish line and consider a co-GP or a sponsor partner.
Can a family office that only does its own deals still work with me?
Sometimes, if you change the structure. A joint venture where they have a bigger say and you run the plan is one example. Many sponsors have an attorney look at structures like this.
Can I be paid for sourcing a deal to a family office?
Some family offices do work with people who bring them deals. Many sponsors talk to an attorney and a compliance professional about how that kind of arrangement might work before agreeing to anything.
Related questions
- Is an acquisition fee in a syndication fair to investors?It can be fair, but only if the fee is modest, clearly disclosed and the sponsor still has real money at risk.
- 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 a hotel purchase?Many hotel buyers fund the equity through joint ventures with family offices and wealthy individuals, then add debt on top.
- How do I raise equity for a ground-up development?Size the equity check first, then decide how much you raise yourself and how much a partner covers.
Work through it with the one-liner builder. See all real estate capital raising and syndication resources.