Real Estate Investing · Investment strategies

Would you join a members only club for accredited investors?

Melissa Askari VP of Vision Development at Mind Above Matter, LLC

May 11th, 2015

I have been considering creating a members only club for accredited investors. This club would be for those who want to be passively involved in real estate investments, and want to work with an organization that will do all the leg work for them. The club would locate properties, do the underwriting, show the value add potential, get the properties under contract, do the due diligence, manage the property for 3-5 years, find an exit, and sell when the market cycle indicates it's time sell. I would like feedback on the viability of this model, and if there would be a need for something like this?

Karl Schulmeisters Founder ExStreamVR

May 11th, 2015

How is this different than a REIT (Real Estate Investment Trust)?  This is a fairly heavily regulated business.  What is it that you would offer different than a standard REIT LLP?

David Rose Manger of the General Partner KG Partners LP, Executive Director at Small School for Equity

May 11th, 2015

I believe that you would be able to raise investment capital for this kind of venture -- I have a couple LLCs that we created that do exactly this -- provide accredited investors with RE exposure in the Bay Area without the investment dd, rehabilitation or management headaches. The market is pretty hot right now so consider how you will really add value to your investments otherwise your returns may be compromised. PM me if you want to discuss the legal structure and payout model -- I have some opinions about this beyond the scope of your question.

Melissa Askari VP of Vision Development at Mind Above Matter, LLC

May 11th, 2015

Karl, to answer your question, I found a link that does a good job explaining the difference:
https://www.biggerpockets.com/forums/48/topics/140563-reit-vs-deal-syndication

Dirk, I've never heard of an AngelList syndicate, so I will start researching that. Have you had personal experience using these lists for real estate syndicates?

Michael Brill Technology startup exec focused on AI-driven products

May 11th, 2015

Similar to Realty Mogul et al?

Lane Campbell Lifelong Entrepreneur

May 11th, 2015

It'd be more interesting if you could find a way to ethically crowd fund a venture like this.  Accredited investors already do all of this. 

Anonymous

May 11th, 2015

Start an AngelList syndicate

https://angel.co/syndicates

Karl Schulmeisters Founder ExStreamVR

May 13th, 2015

Actually I was asking about a Private REIT... primarily because of the tax implications.  It sounds like the big threshold is how many club members you are looking at.   but I would not call it a "club".  "Club" sounds like a hobby and has an air of non-professionalism about it.   What it is is what you should call it:  a Limited Partnership

And your partners are passive partners