Your opinion - Friends and Family Raise or Single Partner?
CRE Pals,

Raising funds for a flex redevelopment project with a partner. 

Total project is below $4.1MM and we are raising $1.4MM. It's our first raise but combined we have deep industry experience. We have raised approximately 70% of our LP capital from friends and family. We received an offer very similar to our proposed structure from a potential partner wanting 100% of LP equity.

It is compelling to have a single partner, we could grow with him and it would make compliance/ IR significantly easier in some ways. They certainly will have more money for deals down the line. But there are downsides about control and not having a granular group of investors.

Well what do you guys think? Go with one LP partner or continue digging for smaller partners?
[{"id": "gle3k90", "text": "One LP makes life a lot easier for reporting and if it goes weird your friends and family won\u2019t get weird with you.", "replies": [{"id": "glesu0q", "text": "Very good point. We are confident in this project and signing PG in either scenario. Have you worked with both in the past?", "replies": [{"id": "glf0jey", "text": "No, I\u2019m on the institutional side. I\u2019ve never invested personal money in a project not worth the opportunity cost. As an LP though it\u2019s driven me nuts when GP doesn\u2019t have their shit together because they have an F&amp;F capital stack and cant make calls on a timely basis.", "replies": [{"id": "glfm299", "text": "Thank you for the perspective. Are you referring to situations where the GP's own funds are from F&amp;F and you guys are serving as the LP?", "replies": [{"id": "glfmfe2", "text": "We always serve as the LP. And yes where GP is ultimately funded by F&amp;F but honestly I haven\u2019t had to deal with that in a while all of our sponsors are pretty institutional.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gle4ma0", "text": "I work in commercial real estate finance helping developers with exactly these questions.\n\nBased on what you laid out I would say go with the one LP as long as the terms aren\u2019t totally unreasonable. \n\nFriends and family money tends to dry out at the worst possible moments, and building a network of LPs helps create a better track record that opens the door to bigger capital relationships down the line.\n\nPM me if you\u2019d like for more details", "replies": [], "depth": 1}, {"id": "glebmqs", "text": "Single partner for sure.", "replies": [{"id": "glfmqmp", "text": "Why do you say that?", "replies": [{"id": "glfy384", "text": "If you even mention scaling. Friends and family don\u2019t scale. But for this deal you can negotiate from a position of power with the single power.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gleigmn", "text": "How do you attract these LPs in the $1MM range?", "replies": [{"id": "glesqm7", "text": "We have developed relationships with institutional LP in our region. This is a small deal for many of them.", "replies": [], "depth": 2}], "depth": 1}, {"id": "glf7662", "text": "Well if you already have commitments from friends and family and then pull the opportunity out from underneath them you run the risk of ruining those relationships and them not investing with you in the future. I say stick with them on this deal and do another deal with just your whale. All of those investors most likely know several other potential investors who will hear about how you made money for them and may want to invest with you on the next deal. Being that\u2019s it\u2019s your first syndication I think having a bit more control would be a good thing versus being at the mercy of one large investor. My two cents.", "replies": [{"id": "glfmpeq", "text": "That is excellent advice and honestly the way I am leaning. We know there is more opportunity down the line with F&amp;F especially if we do well. It seems like the institutional money will always be out there but it comes with its own set of risks.", "replies": [], "depth": 2}, {"id": "glga8a3", "text": "A balance between  both.  You\u2019re helping FF and ours have been awesome.  We give about 1/2 our raises to big family offices.  We like our controls.  A balance is good.  Accredited friends and family are appreciative.  Over 12 years we\u2019ve raised $75 million of equity.  Now when we need to raise $5-$10,000,000 it\u2019s gotten much easier", "replies": [], "depth": 2}], "depth": 1}, {"id": "glgg0zi", "text": "Since you only got to 70% with friends and family, I\u2019d say take the sure thing and expand your investor base on the next deal.", "replies": [], "depth": 1}]