Is the company I work at considered a Private equity real estate firm(?)
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[{"id": "grjqtbg", "text": "property manager.   A bank of llc can retain all its assets, maintain it and dispose it.\n\nThere can be exception to the arrangement.", "replies": [{"id": "grjr7xi", "text": "Okay, so that doesn't really change considering he owns all the properties he manages himself? He makes most of his money buying and selling, I think. Takes the gains and 1031s it into new properties.", "replies": [{"id": "grjvhav", "text": "\"By a single individual, and he has a few partners that invest at least 1 mil on deals\"\n\nSo does this guy work for your firm?  Is he the manager of it?", "replies": [{"id": "grjxjjr", "text": "So basically he owns the properties and has some investors for larger deals that he sends a check to after rent has been collected. He also owns the property management company; we are his employees and manage his properties.\n\n*Btw, if this helps to contextualize things, the guy owns class B properties and has no formal education. He immigrated to the US at 19 or something and basically busted his ass off, and is now extremely rich. The management company itself is very old school\u2014 we just now started using online lease softwares and we keep paper files of literally everything. Of course on his wheeling and dealing end, he deals with professionals in the industry and hes a very smart guy, but definitely rough around the edges type of operations.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "grjwot0", "text": "I mean it\u2019s \u201cprivate equity\u201d in the sense that the properties are owned privately but this guy would be considered an owner operator. It\u2019s only private equity if ownership is raising discretionary closed end vehicles to invest. This doesn\u2019t really match the definition of what I believe most people would consider private equity.", "replies": [{"id": "grjxe0x", "text": "This", "replies": [], "depth": 2}, {"id": "grjzkkc", "text": "So a typical PERE would raise funds from multiple investors and use them to fund multiple RE projects right? So private equity just refers to deals funded thru raising private capital\n\nSo if I ask two friends to provide capital for a duplex and promise them a certain ROR, that would be a private equity deal", "replies": [{"id": "grkzlet", "text": "No through 2 friends for a duplex is a syndication. Also never promise an ROR, that\u2019s illegal and just generally bad practice.", "replies": [{"id": "grl0plb", "text": "What distinguishes a private equity deal? I have read on investopedia it's pretty much high net worth individuals. I mentioned in my original post how the owner of my company has a 1mil limit for big deals, and I know he lets some people with less (100k+) in too sometimes.\n\nAlso I'm thinking in general these labels are used for only really large companies with hundreds of millions under management, and they're not really that important in this particular case.", "replies": [{"id": "grl442y", "text": "Um yea, a PE firm isn\u2019t a guy who owns a small apartment company. Also the goal is totally different - discretionary closed end vehicles but stuff, fix whatever is broken, then sell it as fast as they can. There\u2019s no concept of long term hold", "replies": [{"id": "grl5cu6", "text": "LOL. Yep, sounds about right.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "grl0j42", "text": "&gt;discretionary closed end vehicles\n\nOkay, this explains things. I guess down the line if the company grows a lot they might decide to set it up differently, but for now it's not at that level.. right? lol.", "replies": [{"id": "grl3yf9", "text": "I mean that\u2019s the owners decision but it doesn\u2019t really work that way. To form a new PE fund you kind of have to work for one as a portfolio manager for a while to have the chops to get people to give you money", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "grk1vau", "text": "All capital that isn\u2019t publicly traded is private equity or private debt.\n\nWhen people talk about PERE they are typically talking about funds that raise institutional money from pension and insurance companies to do deals.\n\nThey get a 2/20ish comp structure and raise 100s of millions and billions. \n\nReal estate is so much more entrepreneurial than PE. Most people in real estate work for just a guy that owns a real estate company.", "replies": [{"id": "grl0zid", "text": "&gt;funds that raise institutional money from pension and insurance companies to do deals\n\nOkay yeah, I was reading this on investopedia lol, but they also mentioned HNW individuals so I wanted to ask. The owner doesn't have a sophisticated way of valuing assets and I am unsure if he takes an extra piece of the pie so to speak as far as his deals with partners go. \n\nThanks for your response.", "replies": [{"id": "grl6np7", "text": "Sure thing. \n\nFor clarity, PERE like regular PE definitely also raises money from HNW investors. The smaller the fund the more likely. They might raise blocks as small as $50,000 from single people and hundreds of thousands or millions from institutions. \n\nI would say it\u2019s much more common for these smaller local operators to be the sponsor of a single deal syndication at a time where they do basically the same money raising as PE, but use HNW or family office equity partners.", "replies": [{"id": "grldy0c", "text": "Yep, sounds exactly like what my employer does. Again, I appreciate your responses!", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "grls5y3", "text": "No. Private Equity is what insurance companies and pension funds do with their money, they buy properties and collect the returns like an annuity. Private Debt is lending money without the government backing the loans. Your firm sounds like a management group.", "replies": [], "depth": 1}]