The Value For A Strategic Equity Real Estate Deal Partner

strategic real estate equity partnersA Real Estate  Equity Deal Partner Is Strategic For Our Business

The real estate investing  industry is vibrant and offers many  rewards for adding value.  We are very interested in attracting one source of equity funds for our real estate business.  Our business model is primarily investing in the niche of distressed real estate properties both residential and commercial multi-family. There are exceptions.  We are most interested in a real estate  equity deal partner that contributes to our profitable growth and helps us lower the transaction costs. Since we only recommend deals where we are confident with the profit, a positive deal doing mindset is important.

In a previous article I wrote that nearly every business has one barrier to massive profitable growth. (Click Here for the complete article.) For my firm it is equity funding for our real estate deals.  Working with our continually expanding network, we find really good deals in markets where we have teams that are skilled in managing the day to day requirements of a renovation and then our exit strategy.

Real Estate Investment Deal Structure

Most real estate transactions are a combination of debt and equity. When buying, renovating then reselling distressed properties, debt is short term or often referred to as bridge financing or hard money loans.  The cost of this debt is higher than more traditional bank financing.  Regardless of the source of debt financing, some level of equity is needed. The percentage varies by lender requirement.

Generally we are successful having lenders fund 75-85% of the total cost of the deal including the cost of debt interestingly enough.  For example one deal we are working on has all in costs including cost of money of $4 million. The lender will fund $3.0 million which leaves us to bring $1.0 million of equity.  For his deal we are projecting the equity partner will receive a 46% annualized rate of return on their money.  This percentage is often higher on smaller deals because the time line from start to finish is shorter. For example it is common for us to project annualized returns for equity funding partners greater than 80% for a single family fix and flip.

Our Deal Focus

We like deals where we are adding value to the property which in turns adds value for the final buyer or tenant. When we do this we improve the neighborhood and the community. We have an increased focus on using more alternative power in our projects and “green technology”.

Equity Deal Funding Resource Targeted 

The volume and size of deals we are finding are growing.  Accordingly we are interested in a source of equity that will support our growth.  This means having access to at least $10 million liquid for an equity participation on a deal by deal basis over then next 4-6 months is strategic for us.

If this catches your attention I would love to talk with you

Steve Pohlit, Business and Real Estate Coach, Consultant, Real Estate Investor. Published Author, Professional Speaker
Steve Pohlit, Business and Real Estate Coach, Consultant, Real Estate Investor. Published Author, Professional Speaker

Steve Pohlit, Managing Partner


The iPhone, ATT, Verizon : Great Lessons What Is Your Experience

The iPhone Is Coming To Verizon …Very Soon

The Wall Street Journal’s  lead article Friday confirms Verizon will offer the iPhone soon. Reportedly Verizon will announce the details Tuesday.

In a related article, Apple has issued a directive to all stores that there will be no vacations for three weeks beginning the fourth week of January. I couldn’t be happier with the opportunity to switch from ATT My view is shared with everyone I know who has an iPhone

The Number One Reason This Announcement Is A Big Deal

Everyone that I know including myself loves the iPhone and hates ATT’s service.  Apple recognizes this since a big percentage of the volume of calls to their customer service center are because of ATT not resolving customer issues having nothing to do with Apple.

I have previously written detailed article about my  experience started trying to work with ATT for a solution. In summary, I have good experience overall across the US and Canada. The area that I use my phone the most which is my home office and surrounding areas is almost impossible for me to use my phone. This area has plenty of towers and ATT reports I should have great service but of course I don’t

This announcement is a huge deal because it demonstrates Apple’s laser beam focus on customer satisfaction and highlights in my view ATT’s mishandling an iPhone market domination opportunity.

Lessons: Apple Strategy Outstanding,  Verizon Strategy a Plus  ATT Strategy Doesn’t Work

I have experience with both Verizon and ATT. Recently I tested another phone with Verizon and I was very pleased with the entire experience including the attention at the Verizon owned store,  customer service, billing and phone service.  The only reason I didn’t changes was that at the same time I was testing a new phone I read Verizon would be carrying the iPhone and I wanted to wait.

Apple has done a great job of developing strong customer loyalty.  I am sure there are people who have given up their iPhone to switch to another service after being worn out by ATT but I don’t know any of them.  Everyone I know who has an iPhone wants to keep it.  Apple understands what will appeal to the consumer and consistently delivers.

Verizon has been out there focused on offering a very strong cellular network.  Every Verizion customer I know is happy with Verizon service and coverage….No Exceptions! My brief experience with the store staff, customer service and tech support was very positive.  Verizon is  focused on solutions and not excuses.

Verizon and Apple Together Should Be An Outstanding Experience For Consumers

This all makes for an excellent case study on how ATT  did not capitalize on a huge opportunity. If they had consistently delivered on quality of coverage and customer care, Verizon would not have a chance.  Now Verizon has the opportunity to take huge market share.  I betting they will.

What Is Your Experience?…Please Comment

Steve Pohlit

Business Development Consulting
Executive Coach