Investing In Real Estate Private Equity Sean Cook

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Exactly How To Get Motivated Seller Leads

329: An Insider’s Guide to Investing in Private Real Estate Deals

If you intend on being an agent or financier after that youll require a way to obtain determined seller leads. Some individuals will certainly utilize Facebook genuine estate leads by running paid ads towards high-end markets or perhaps advertising themselves. If youre clever regarding it then youll obtain your self a high transforming lead generation internet site for your company from investor carrot..

Whether you have actually remained in the real estate video game some time or are just getting involved in it after that you recognize that advertising and marketing plays a substantial part in your success. The life blood of any business is in the capacity to drive leads into their business and after that generate profits out of those leads.

If your sales procedure or that lead generating system isnt working correctly after that youll enter into panic setting. Every person wants to cash the huge real estate checks but to get those, you will need customers! Ill malfunction what others are doing today as well as what you ought to do thats worked quite possibly..

Learn From Your Peers And Mentors

Every business interaction can either build or erode the strength of your network. Be selective about the relationships you nurture, and always remember that how you handle yourself will determine whether people want to work with you in the future.

The private investment professionals who have contributed a great deal, both in capital and in strategic expertise, clearly have much to share with people who want to understand how businesses succeed or fail. Choosing to absorb what these successes or failures teach is akin to adopting mentors for our own careers. Their ideas, their habits, their ethics, their successes, their failures we embrace the best of these winning qualities because we want to emulate the people who embody them.

Robert Finkel, The Masters of Private Equity and Venture Capital

Monitoring involves providing management advice and helping with the funds network. Mentoring will be most fruitful when the management of the portfolio company realizes the value of mentoring and appreciates the advice. Already before the acquisition, the private equity fund will signalize the advantage of mentoring and a regular exchange of ideas.

Daniel Burmester, Private Equity: How the Business of Private Equity Funds Works

Winter Mead, How to Raise a Venture Capital Fund: The Essential Guide on Fundraising and Understanding Limited Partners

Target Deals And Markets Today

  • Today, they tend to be more focused on bread and butter type deals
  • If you look at a bell curve of quality of assets
  • They lop off the low end where theres high crime and very difficult capital issues that need to be solved and functional obsolescence
  • Also, eliminate the other side that is very new construction, a lot of pipeline and uncertainty
  • They tend to be right in the middle
  • They know their markets very well
  • Over 1,500 units
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    How To Get 80% Of The Benefits Of Real Estate Investing With 1% Of The Time And Effort

    By Dr. Peter Kim of Passive Income MD, WCI Network Partner

    While many of us like to believe were superhumanor at least we try to act like itthe truth is that we dont have infinite resources at our disposal. The greatest limitation is the amount of time we have. There are only 24 hours in a day and 168 hours in a week.

    When we dedicate our time to something, it means we cant give it to something else. Something has to give.

    For example, you want to spend as much time as you can with your family, but you also need to work to create income to support your family. You also want to spend time doing other things that you enjoy doing. So, the key is to minimize the time doing things you have to do but dont enjoy, but still maximize the benefits you get from doing those things.

    For example, how can you squeeze out the most benefit from time spent working? Well, the best way would be to figure out how to get compensated the most for your time. If you knew that working eight hours a day and getting paid $150 an hour would give you the lifestyle you want, then why not try to figure out how to work four hours a day and get paid $300 an hour? Then, youre able to free up your time to do other things you truly enjoy.

    I like to focus on the 80-1 rule, and well get to that in a moment . . .

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    How To Choose A Good Sponsor

    • Not all forecasts and projections are created equally
    • Some sponsors are very aggressive in the way they underwrite and project much higher returns
    • Some sponsors tend to be conservative
    • The conservative sponsors tend to not need the investors as badly
    • Some of the highest projected highest returns on paper tend to come from less experienced sponsors
  • Pick a sponsor that has been around for a long time
  • Pick a sponsor who is active in the market
  • Will get preferred deal terms
  • Will deals from other principles because the principles want to do good deals together
  • Best debt terms
  • Best analysis because they have a big portfolio that they can rely on to make good projections
  • First, talk with your financial adviser or accountant
  • Think about your investment portfolio holistically
  • What percentage of your investments do you want to be in real estate?
  • Do I want REITS ?
  • Private equity deals?
  • Determine what type of assets
  • Once you decide, determine the allocation amount to invest
  • Then ask who are the best multifamily, office, self-storage, etc. operators out there
  • Talk to a lot of other investors especially those in the space you want to be in for recommendations
  • Look at trade magazines, Co-Star, Multifamily Housing Association News
  • Look to see who is in the markets of interest to you
  • Make a short-list of good prospective companies
  • Find a good company
  • Find out what their track record is
  • When you receive an offering from them, assess the offering and invest or not
  • deal economic terms
  • Key Real Estate Terms

    Lease-Up

    This is the phase of a projects time line when the building has been completed and the leasing team is actively filling units with tenants to reach stabilization.

    Stabilization

    At this point a project has been completed and leased-up to a certain occupancy threshold, typically 90% or greater.

    Loan to Cost

    This ratio compares the amount of debt on a project to the total cost of the project. It is expressed as a percentage computed by dividing the total debt by the total project costs. For example, a $10 million project with $6.5 million in debt is said to have an LTC of 65%.

    Loan to Value

    Similar to LTC, the LTV is a leverage ratio, but instead of comparing against total project costs, it is compared against he project’s market value. For example, a development deal may have an LTC of 65% as noted in the example above, but upon completion the market value of the property is $12.5 million, and the stabilized LTV is only 52%.

    Debt Service Coverage Ratio

    This is a common ratio lenders use to look at the safety of the owner covering debt payments. It is computed by dividing the property’s net operating income by the debt service required to be paid.

    Net Operating Income

    This is the asset’s operating profit, which is computed by subtracting all operating expenses from operating revenues. This figure excludes interest, taxes, depreciation, and capital expenditures.

    Cash-on-Cash

    Capitalization Rate

    Return on Cost

    Triple-Net Lease

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    Remember The Importance Of Give And Take

    Experienced dealmakers know that reciprocity turns private equity networking from a chore into a pleasure. Heres what they have to say about relational reciprocation.

    Life is long, and helping people when they need it often comes back to you in ways you least expect it. You never forget the friends who came to your aid in tough situations.

    Stephen A. Schwarzman, What It Takes

    Ultimately, the constraint on fund managers is reputational: In the long run, investors will not support fund managers that abuse their relationships.

    John Gilligan and Mike Wright, Private Equity Demystified

    If you keep to yourself, its a loss to others. They cant get to know you and benefit from the value you bring to the situation. And you lose, too, because you dont get to benefit from the value of others.

    Debra Benton

    A lifetime of listening to others, forging relationships and constantly asking how I can help has compounded to the point where many of the biggest challenges and best ideas now find me.

    Stephen A. Schwarzman, What It Takes

    Networking with other investors a good way to hear about potential investment companies, and perhaps more importantly, a great way to get feedback about good and bad experiences with those companies.

    Sean Cook, Investing in Real Estate Private Equity: An Insiders Guide to Real Estate Partnerships, Funds, Joint Ventures & Crowdfunding

    Build And Maintain Pe Relationships

    Real Estate Private Equity Book Review

    Private equity dealmakers continually seek and foster strong relationships. Heres why and how.

    To be successful in venture capital, you have to be curious about people, and you have to care on a non-transactional level. I try to surround myself with founders, investors, and operators who think about relationships in terms of decades, not just today dollars. We share deals and intros but also invest time into each other through advice, feedback, help, and heart. Haley Bryant,Golden Wok

    almost like doing business with friends. Companies will come and go, employees may come and go, but the people in the private equity industry tend to be fairly stagnant. You keep crossing paths with people, so its imperative to treat them well and with integrity.

    Adam Coffey,The Private Equity Playbook: Managements Guide to Working with Private Equity

    Dont get discouraged if meetings seem useless or a waste of time. Many relationships take years to develop, and if you meet founders or angels or that do not necessarily have anything interesting for you today, they may well call you in the future with more attractive information or startups.

    If you want to get anything done, the strength of your relationships means everything

    Wall Street and business are small worlds. If you start at a great school or a big firm, crossing paths with the best people of your generation, youll keep running into them.

    Stephen A. Schwarzman,What It Takes

    Also Check: Investing In A Brokerage Account

    Outside Your Comfort Zone

    Some private equity practitioners would prefer to leave the networking to others. A little inspiration from these dealmakers might help.

    Leverage your network! The best way to discover engaged and compatible is through venture capitalists who have already raised venture capital funds.

    Winter Mead, How to Raise a Venture Capital Fund: The Essential Guide on Fundraising and Understanding Limited Partners

    One of the hardest periods of my life was raising the money for the first fund. There was nearly always a personal relationship.

    Peter G. Peterson

    We had started modestly and spent years building up our knowledge, experience, and relationships so that we could maximize our rewards and minimize our risks over the course of multiple turns in the cycle.

    Stephen A. Schwarzman, What It Takes

    Relationship building is critical to wealth building. The best private equity investments are exclusive to close friends and investors only.

    Symoné B. Beez

    Although didnt enjoy finance in particular, his strength was his range of contacts in business and politics. He could get anyone on the phone. He was 21 years older than me, but we had developed a close working relationship. We complemented each other. He could bring people together and nurture relationships I could originate and execute deals. He was a thinker, tolerant and reflective. I could be confrontational if necessary.

    Stephen A. Schwarzman, What It Takes

    Surround Yourself With Trustworthy Partners

    Capital markets relationships are built on mutual trust and respect. Top dealmakers share why:

    A strong and trust-based relationship between company management and private equity investors is the basis for value-added involvement in strategic and operational decisions.

    John Gilligan and Mike Wright, Private Equity Demystified

    The best way to get a sense of the performance and character of a manager is to have long-term experience with them, through good times and bad. Therefore, referrals to managers through trusted friends or advisers are extremely valuable.

    Sean Cook,Investing in Real Estate Private Equity: An Insiders Guide to Real Estate Partnerships, Funds, Joint Ventures & Crowdfunding

    Try to build strong relationships with a handful of trustworthy . Pitch the fundraising process early on in the relationship. As trusted confidants, they will work through fund ideas and pitches with you before you pitch to the general market.

    Winter Mead, How to Raise a Venture Capital Fund: The Essential Guide on Fundraising and Understanding Limited Partners

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    Allowing For The Economy

    • Many people in real estate, like many other industries, would like to know what will happen with the economy
    • Even at his company, they pay very smart economistsresearch that will try to give them some understanding on what will happen but, at the end of the day, theres not perfect information on what will happen with the economy
    • Thats why its important to not take at face value what assumptions are being used with whatever model is being used to evaluate a deal
    • You always need to ask, Whats the upside and whats the downside scenario on what the economy will do?
    • His company spends a lot of time on risk-proofing deals and thinking about their downside scenarios by asking What can a deal tolerate before they have a problem?
    • Because they tend to invest in long-term deals which may include some good years and some bad years
    • They dont know when the bad years may hit but they just want to make sure, going in, that they are capitalized in a way that they can ride out smoothly and try to get through to the other side
    • To reduce risk, they make sure they use an appropriate amount of debt, if possible, and cash flow that and 10 years from now, theyll be glad they own that asset
  • Its easy to read economic analysis and become over-confident in your understanding of whats going to happen but thats just the business of forecasting economics
  • Most investors underestimate the uncertainty in the economy
  • If the market does great, youll win
  • They use lower levels of debt
  • How To Approach Passive Investing

    10 Statesman Way, Point Cook VIC 3030
    • He knows the challenge of finding good investments from different groups and different strategies
    • On the venture capital side, he had to find the right companies to invest in
    • Working with family offices, he had to find the best real estate deals for wealthy families
  • Today, he is on the other side in that he is putting together deals for investors
  • Both sides are complicated in their own ways
  • He wrote a book a few years ago called Investing in Real Estate Private Equity, written under an alias .
  • We wrote it under a pseudonym because he wanted to give people honest advice how to invest in this space privately, as a passive investor, not on behalf of his employer. He thinks there is already a lot of salesy advice and get rich quick schemes out there already and didnt want to be a part of that.
  • How to approach passive investing: The most important thing is to pick a good sponsor
  • Also Check: Axa Real Estate Investment Managers

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    Real Estate Law Firm In Markham On

    SCOTT M. COOK

    Scott Cook is a Markham-based lawyer, specializing in real estate, both residential and commercial. After graduating from Queen’s University with a Bachelor of Arts, Bachelor of Physical and Health Education and a Bachelor of Education Scott had a successful career as a high school teacher for the Toronto District School Board.

    Scott then decided to pursue law, graduated from Osgoode Hall Law School, was called to Bar in 1997 and promptly opened his own practice in Markham.

    After more than two decades, Scott has become a trusted adviser and friend to his client base of individuals and families who continue to return to him for all their legal needs.

    Our History and the Present

    We began as a Real Estate Law Firm focused on Purchase/Sale Closings and Mortgage Refinances for Residential Properties.

    After two decades, safe to say that we have contributed to the growth of many communities, throughout Toronto, the Greater Toronto Area and all of Southern Ontario.

    New to our repertoire includes closing services for the Purchase and Sale of Commercial Properties. We offer a tedious review of documentation necessary for this complex transaction as well, a host of other support services during possession of the Commercial property.

    Our Difference

    What makes us different has not changed over the years: we will not subject you to the factory approach.

    Our Lawyers believe in meeting personally with you to fully explain every aspect of your legal matter.

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