Raising Real Estate Capital With Private Placements
Real Estate Investor News: I'm here with Nick Jevic, the founder and owner of RealEstateCapitalPro.com, a web site committed to helping property deal sponsors spend less when raising private capital.
real estate capital
First question - Exactly what do the thing is as one of the main challenges legitimate estate investment sponsor today?
Nick Jevic: What There is is always that many real-estate sponsors can find property opportunities, the way to benefit from it, and also the knowhow to take everything to fruition. But whatever they don’t have, or at best don’t have enough of, is capital.
Nick Jevic
In some sectors and deal sizes, the periods continue to be dark and gloomy for real estate, but smart real-estate sponsors still find exceptional the possiblility to make money on this market. Whether it's buying underperforming debt secured by real-estate, buying in to a busted development, acquiring foreclosures or tax lien auctions - they've the deals as well as the know-how to earn money together. And that’s what investors are looking for - somebody who could make money for the kids.
Nick Jevic
REIN: So how does that leave property professionals today?
NJ: If the above description describes you, then raising capital is most likely fairly high on your "gotta do" list. When a sponsor has gone out raising money for any real-estate deal and a fund, among the first things they’ll should get is an exclusive placement memorandum, or a PPM. You may be thinking a PPM is one thing for your corporate guys trying to raise equity to obtain a business. But whenever you're raising money from investors - issuing securities (think issuing a security in return for money), in that case your activities fall under state and federal securities laws. And specifically, as you are performing a private transaction you're issuing what is known “unregistered securities,” which falls under Reg-D with the Securities Act of 1933.
REIN: If I'm assembling a real estate deal, fund, or syndicate, so why do I want a PPM?
NJ: So, not only is there a legal requirement to adhere to both federal and state securities laws, but simply by using a PPM you'll provide yourself with cover from securities fraud claims. Having a defining document to your transaction, tthere shouldn't be questions regarding exactly what the deal is. Furthermore, your prospective investors, when they are active in private investments, will expect to determine a PPM.
REIN: What's in it for that investors?
NJ: The PPM is really a document that provides your prospective investors challenging information they might require to produce an intelligent decision about whether to invest in your transaction or otherwise not. Having a view from 30,000 feet, the PPM will include legal legends for that good thing about the investor, an expression sheet that spells the economics and legal provisions from the transaction, as well as the risks of the transaction.
REIN: Is the PPM expensive?
NJ: The process for any deal sponsor is that a PPM can be very expensive. To get a consultant or attorney draft an exclusive Placement Memorandum, you can expect to settle to $30,000. And know that this is an upfront expense that will get paid whether you successfully get the money raised or otherwise not. Busted deal expenses may be painful.
Fortunately, there is a more effective and price effective way to obtain your PPM drafted. Having a Private Placement Memorandum Template from RealEstatecapitalPro.com, you are able to draft your individual placement memorandum, then have your attorney analyze it, which is clearly an even more efficient use of your legal resources.
So keep finding those real-estate opportunities and stay compliant when raising capital simply by using a Private Placement Memorandum. Remember, it’s not only for corporate transactions.
REIN: Thanks Nick
Nick Jevic has over 30 years of expertise in banking, corporate finance, and capital markets. Through RealEstateCapitalPro.com he helps real-estate sponsors navigate Reg D and also the process of obtaining a private placement completed without spending hundreds and hundreds of dollars.
real estate capital
First question - Exactly what do the thing is as one of the main challenges legitimate estate investment sponsor today?
Nick Jevic: What There is is always that many real-estate sponsors can find property opportunities, the way to benefit from it, and also the knowhow to take everything to fruition. But whatever they don’t have, or at best don’t have enough of, is capital.
Nick Jevic
In some sectors and deal sizes, the periods continue to be dark and gloomy for real estate, but smart real-estate sponsors still find exceptional the possiblility to make money on this market. Whether it's buying underperforming debt secured by real-estate, buying in to a busted development, acquiring foreclosures or tax lien auctions - they've the deals as well as the know-how to earn money together. And that’s what investors are looking for - somebody who could make money for the kids.
Nick Jevic
REIN: So how does that leave property professionals today?
NJ: If the above description describes you, then raising capital is most likely fairly high on your "gotta do" list. When a sponsor has gone out raising money for any real-estate deal and a fund, among the first things they’ll should get is an exclusive placement memorandum, or a PPM. You may be thinking a PPM is one thing for your corporate guys trying to raise equity to obtain a business. But whenever you're raising money from investors - issuing securities (think issuing a security in return for money), in that case your activities fall under state and federal securities laws. And specifically, as you are performing a private transaction you're issuing what is known “unregistered securities,” which falls under Reg-D with the Securities Act of 1933.
REIN: If I'm assembling a real estate deal, fund, or syndicate, so why do I want a PPM?
NJ: So, not only is there a legal requirement to adhere to both federal and state securities laws, but simply by using a PPM you'll provide yourself with cover from securities fraud claims. Having a defining document to your transaction, tthere shouldn't be questions regarding exactly what the deal is. Furthermore, your prospective investors, when they are active in private investments, will expect to determine a PPM.
REIN: What's in it for that investors?
NJ: The PPM is really a document that provides your prospective investors challenging information they might require to produce an intelligent decision about whether to invest in your transaction or otherwise not. Having a view from 30,000 feet, the PPM will include legal legends for that good thing about the investor, an expression sheet that spells the economics and legal provisions from the transaction, as well as the risks of the transaction.
REIN: Is the PPM expensive?
NJ: The process for any deal sponsor is that a PPM can be very expensive. To get a consultant or attorney draft an exclusive Placement Memorandum, you can expect to settle to $30,000. And know that this is an upfront expense that will get paid whether you successfully get the money raised or otherwise not. Busted deal expenses may be painful.
Fortunately, there is a more effective and price effective way to obtain your PPM drafted. Having a Private Placement Memorandum Template from RealEstatecapitalPro.com, you are able to draft your individual placement memorandum, then have your attorney analyze it, which is clearly an even more efficient use of your legal resources.
So keep finding those real-estate opportunities and stay compliant when raising capital simply by using a Private Placement Memorandum. Remember, it’s not only for corporate transactions.
REIN: Thanks Nick
Nick Jevic has over 30 years of expertise in banking, corporate finance, and capital markets. Through RealEstateCapitalPro.com he helps real-estate sponsors navigate Reg D and also the process of obtaining a private placement completed without spending hundreds and hundreds of dollars.