4 Private Money Fund Manager Strategies for Starting a New Fund

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Last week we talked about 5 Core Functions of a Private Money Fund Manager.

If you haven’t read it, go do so now. You’ll need to know what a PMFM should be doing, before you know which strategies they should be following.

The 4 Strategies I’m sharing with you today should be the drivers for good decision-making. Keep them handy the next time you’re starting a new fund, or the next time your own PMFM is starting one for you.

I’m even giving you a downloadable blueprint of these 4 strategies, so there’s no excuse to not put it to work. Swipe that here, and let’s get right to strategy #1.

Strategies-For-Starting-a-New-Fund-NEW

1. Your Asset Model

Be dispassionate about the numbers.

What do they say?

  • What is the minimum amount you need to be profitable?
  • How much capital can you reasonably deploy in the next 3, 6, 12 months?
  • Where is the bulk of your expenses going to be?
  • What are the returns you’re looking for? Your investors looking for?
  • What are your hurdles?

You need to be able to answer all of these questions in order to make the best decisions.

(IMPORTANT: I’m spelling out in easy, step-by-step detail the 3 BIG commercial “buckets” that brings in the bacon. Join me for this hit the ground running, pay attention, take action strategy session called 3 Secrets to Commercial Investing Success. Spots are limited and, as of right now, I have no intentions of doing a second broadcast. Register now.)

2. Appropriate Capital Structure

Will you be debt or equity?

Who will your investors be?

Will they use their Self-Directed IRAs?
If so, debt may not be appropriate to use.

Everyone and their brother, plus their neighbor’s doctor’s best friend, will want profits as soon as they’re available. How will you distribute them?

You have options, but you need to know which route you’ll take.

Most commonly chosen are…

3. Financial Model

Again.. Be dispassionate about the numbers.

What do they say?

  • What is the minimum amount you need to be profitable?
  • How much capital can you reasonably deploy in the next 3, 6, 12 months?
  • Where is the bulk of your expenses going to be?
  • What are the returns you’re looking for? Your investors looking for?
  • What are your hurdles?

Do I sound like a broken record yet?

Answer all these questions and make the smart decision.

4. Private Placement Memorandum

Do you have the funds to get the “doc” written?

RELATED:  7 Crucial Metrics to Include in Your Deal (…read this before submitting your next deal for review)

How many firm investors do you have? Family and friends?

Make absolutely certain you have your marketing materials finished and investors waiting desperately before committing to this expense.

Until next time…

(IMPORTANT: I’m spelling out in easy, step-by-step detail the 3 BIG commercial “buckets” that brings in the bacon. Join me for this hit the ground running, pay attention, take action strategy session called 3 Secrets to Commercial Investing Success. Spots are limited and, as of right now, I have no intentions of doing a second broadcast. Register now.)

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Salvatore M. Buscemi
A former investment banker for Goldman Sachs in NYC, Sal is one of the nation’s leading authorities when it comes to investing in residential and commercial real estate. He’s raised over $50 Million in capital for his real estate hedge funds.

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Salvatore M. Buscemi

About Salvatore M. Buscemi

A former investment banker for Goldman Sachs in NYC, Sal is one of the nation’s leading authorities when it comes to investing in residential and commercial real estate. He’s raised over $50 Million in capital for his real estate hedge funds.
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