Commercial Real Estate Development California ~ Multi-Family
[{"id": "ihua0l2", "text": "I'm not writing this to be overly discouraging, as every developer began somewhere and risked their time and capital to grow. \n\nWith that said, most developers who syndicate the equity portion of the capital stack come from a background that adds value to the process (brokerage, construction management, design or entitlement, finance, property management etc...). By asking investors to co-invest in a project with you - especially if they're going to be risking vastly more than you as you've proposed in your 90/10 split - they are investing in your ability to complete the development on time, meeting or exceeding pro-forma costs and returns, and managing or mitigating market risks on their behalf. \n\nYou should ask yourself what skills you possess that would allow you to walk into the office of a potential investor who owns or manages significantly more captial than yourself and honestly pitch them as to why your project is a sound vehicle for wealth creation and why you are the right sponsor to execute on that project. Equity market players see dozens of potential deals a week being shopped by established developers with strong track records. Why would they invest with a first timer? Even if you found a fantastic off-market deal, you'd be better off putting it under contract and approaching a more established developer with a proposal to JV so you can learn the process alongside a group that has done it before. You'll also meet equity groups through this process that might invest with you directly in the future.\n\nIn reading your post, I genuinely admire your passion, but I don't get the sense you're particularly experienced in any area of CRE based on your questions and statements. This is something that can be fixed, so don't be too discouraged but I'd really recommend backfilling your experience with time in brokerage or shadowing/JVing with a proven developer. This is an extremely challenging market to try to start a career in real estate development with rates climbing to 20 year highs, capital markets fearing recession, hard cost inflation, a plunging national housing market and rental household incomes getting stretched. \n\nIt's your money and you have every right to risk it as you see fit, but I wouldn't recommend it and I doubt you'll find a lot of investors lining up to invest alongside you right now.", "replies": [{"id": "iid0ep2", "text": "This. Save your money and get some experience. Speaking from a socal developer", "replies": [], "depth": 2}], "depth": 1}]