Do you want to invest in commercial real estate but unsure where to start? One thing you have to consider is MONEY! In this episode Lisa reveals why she is launching a real estate fund that helps you in determining your steps if you decide to enter this industry. Expose yourself to endless opportunities and take the risk. You’ll never know the success you can achieve in this industry if you don’t try.
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Why I Am Launching A Real Estate Fund
This episode is on why I am launching a real estate fund. For those of you who don’t know, I do talk about my upcoming 506(c) Accredited Investor Fund. I wanted to dedicate an episode talking about why I decided to launch it. There are five reasons why I decided to launch it. The first is I wanted diversification.
As I thought about my journey to continue investing in commercial real estate, many times, I see more and more deals coming from operators because creating a platform gives me exposure to a lot of different operators. They will send through deals with a minimum investments of $75,000, $100,000, $250,000, $500,000, and all this stuff.
I thought to myself, “I want to keep investing in commercial real estate. How can I do it in a way where I get access to more than one deal,” diversification. I feel like I’m a typical investor. I know there are some investors out there that can be investing $1 million in a given year and that’s great. Most regular 506(c) type investors are probably deploying anywhere between $100,000 to $500,000 into commercial real estate deals in a given year.
If each deal is requiring $50,000 or $100,000 minimum, that quickly means that’s only two deals or maybe just one, and I didn’t like that. I wanted to create something that would be able to provide me with the opportunity to have exposure to more commercial real estate opportunities than just one. Diversification was the first pull. I figured other people might want to do this too. That’s the second thing.
I always think that businesses are born out of you seeking to solve a problem. In my opinion, the problem is that I want diversification. I want to be able to invest in commercial real estate projects but not have all of my money in just one deal in that one year. My second thing was I’m pretty sure that if I feel this way, there have got to be other people out there that feel this way too. I’m hoping that by having these conversations on my show, there are probably people who feel the same way and might want to sign up to talk to me, and to learn more about what it might look like to participate in my fund.
The second thing is I wanted to have access to good sponsors. I know that there are deals out there that will allow you to come in at $25,000 and all that other stuff. I always found that the people who were willing to do that were always people who were getting started. As they continued to build their track record, they then moved to a place where they now wanted a $100,000 minimum. I get it and I understand it because by doing a $100,000 minimum, you don’t have to deal with so many investors. There are administrative deals with that and everything.
I’m fully aware of that because I used to work on those big funds in the institutional space. When you close on a fund that has 150 investors, it is a nightmare. Whereas if you have a fund that has 10 to 25, it’s very nice. It’s super easy to take care of. Once you start getting into the larger investor count, it adds up. That is an admin work on its own. I wanted to have access to good sponsors. That was the third reason.
The fourth reason is lower minimums without sacrificing deal quality, as well as operator quality. It’s going back to the same thing. As these operators get more sophisticated, they generally play only with accredited investors. On top of that, they also want a higher minimum investment. That’s where I was like, “There’s got to be a desire for this.”I want to create something that would be able to provide you the opportunity to have exposure to more commercial real estate opportunities. Click To Tweet
The last thing is I took a step back and thought about the way I was building my business. I said, “How can I use all of my skills?” I did an episode about swirling and that’s the fifth reason why I’m launching the real estate fund. It is because I have spent my entire career either auditing funds or taking care of people’s funds. I thought to myself, “I can do this.” That’s why I decided to launch it and to move forward, and that’s what’s going on.
For those of you who don’t know, I have invested in about six syndications. Two of which have gone full cycle, meaning that two have sold in 2021. My first investment was in 2019. I did two in 2019 and two in 2020. I’m on of this two-a-year thing. In 2022, the plan is to do a few more. Maybe it’s 2, 3 or more, but through my fund, I will seek to diversify the capital that I seek to invest in 2022 across multiple different commercial real estate asset classes.
Multifamily is my darling of a child. I do like investing in the asset class, but I also like other asset classes that are out there. As I continue to learn and build my knowledge in those areas, I want to be able to also offer them as investments for investors who are interested in investing. The fund is for accredited investors only because that’s the only way I would be able to talk about it publicly, otherwise, it would be illegal.
Hopefully, this episode is super helpful. If you have any questions about my fund and want to learn more about some of the opportunities that might be coming up through it, you can reach out to me. The way to do that is to go to my website, which is LisaHylton.com/invest and sign up. Once you sign up there, you’ll get an email that gives you some information about Lisa Hylton and also a link to sign up to book a call and get on a call with me and we can chat. I can learn a little bit more about you and you can learn a little bit more about me, and we’ll go from there. It’s a very short episode and I hope you have an awesome week ahead. Keep leveling up.
- Leaps, Pivots, And Swirls – What I Learnt – Previous episode
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