The Terry Hale Show Episode 26

Raising Capital

TRANSCRIPTION

Hey, this is Terry Hale commercial real estate wealth builder.
I want to talk with you here about a topic that came up a couple times
Over this last week with a few clients of mine. And it’s about basically bringing in
Capital on a deal. And they have this kind of misconception in their mind that
It’s going to be difficult to raise money, but you got like this apartment buildingBehind me, you got something that’s got cash flow coming in,
And it’s got more potential even bringing more cash flow. Raising rents,
Adding profit centers, doing some light rehab, cosmetic fix. You can, just as raising rents,
And doing it with a house, it’s the same thing except, apartment buildings,
They’re basically a bunch of houses inside a larger box, more income.
But these properties are based on a different value add,
They’re based on upping the net income. And if you do a rental increase,
You’re not adding any expense by just increasing rent. So what happens is
The NOI goes up just a little bit, but the value of the property goes up a lot.
I mean, you can raise rents, and if you bump just several thousands of dollars,
You know, you’re talking about adding tens of thousands in value. So it’s a real,
Great business to be in and raising capital is not as difficult as it seems.
There’s different types of money. One type of money that
You can go after is private funds. Obviously, they have to be accredited investors,
Accredited investors, you can look that up and see that they have to meet a 3 rule.
And accredited investors, these are people that will go ahead and fund your projects.
Just be careful though, because you want to give up too much equity.
You can give up an equity piece, or you can just give a return on their investment.
And then obviously, that comes with a balloon date when you give them
Their money back, plus all of the earnings. Another way to do it is a syndication.
That’s a different model its for bigger projects. There’s also PPMs,
Which their Private Placement Memorandums. There’s a lot of different ways
That you can raise capital, but make sure that you have the right deal.Make sure that the numbers work. Make sure that there’s upside potential in the project.
Make sure that it’s actually a project that someone would want to invest in.
Stop chasing the deals. Stop trying to make these deals that don’t make sense
Come to fruition because it’s basically be like hitting your head
Against this garage door here. Right? What you want to do is
You want to make sure that the numbers work. You want to make sure that
There’s tremendous upside, you still want to get great terms
And you also want to buy it right. And if you can do that dynamic,
And do those three things, as I just mentioned, buy it right, have creative terms
And have huge upside. I’m telling you, it attracts money like a magnet.
All right, if you did this session, go ahead and click the link below.
And or better yet, just go to https://terryhale.com/
And I look forward to engaging with you here real soon. All right, take care.
To learn more strategies and techniques, visit https://terryhale.com/ or
Go ahead and click the link in this video description.
And I look forward to engaging with you real soon.

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