Podcast: How to Raise Private Equity to Buy Distressed Assets

Learn How to Raise Private Equity (the right way)

How to put together a private equity fundIf you want to get access to better bigger note deals you need more money, period. You can earn it, you can borrow it, or you can find some people with it and pool your money.

There are a few challenges with borrowing money to do speculative deals, including note deals. The first obvious and probably most significant challenge is even finding a lender who will put debt on paper (as colateral) for you. Unless you have a line of credit, like a business line or a warehouse line (or similar) already you’re probably going to have a tough time.

Maybe you’ll find a private lender who will will loan you money against the paper you’re buying but my experience is those guys are few and far between and I’m willing to bet that today you’re looking at a bunch of points and north of 16%, and the truth is probably much more, not to mention the term will be painfully short.

If you’re someone who is able to earn whatever you need, on-demand, to satisfy your investment goals then stop reading this right now and please call me to discuss….

In reality what you’re probably going to have to do is put some money together, capital, EQUITY. If you’re not doing this then you’re finding someone else who already has money or who has already put together other people’s money, a fund. Enter… ‘Private Equity’.

I must warn you, if you have no track record of success then the interview I’m about to share with you is some good information that you should keep in the back of your mind and maybe even work into your grand plan but it’s not something you’re going to be able to act on today.

If, on the other hand, you are someone who has documentable success with all of the resources that you’ve had available up to now, and your major limiting factor is capital, this podcast is for you.

There are rules and regulations that will apply to you when you decide that you’re going to take other people’s money and help them get rich. I don’t know about you but the first person I seek out before I do anything in business like this is good counsel.

So that’s what I’ve done.

I called my good friend Warren Kirshenbaum who is a successful attorney and who has been helping investors assemble successful offerings for some time. I grilled Warren about every capital raising questions I could think of, related to assembling a mid-7 figure fund, over an hour’s time and I recorded it all and had it transcribed for you.

Some of the things we cover include:

  • What type of legal structure do I have to have to invest with other people’s money?
  • What are my options for compensation for myself from the fund?
  • What sort of equity should/can I retain?
  • What rules or regs do I need to be aware of before I start soliciting investors for funds?
  • Who can (or should!) invest with me?
  • How do I determine what I should set for a minimum level of participation?
  • What are some acceptable ways to find investors? Who can help me with that?
  • What happens if an investor wants out?
  • What does it cost to put this all together?

Capital is capital, it doesn’t matter if you’re looking to raise it to buy real estate, notes or other assets, what we talk about in this podcast likely applies.

It’s important to note that we are not providing legal advice. You should seek out personal advice form Warren or someone like him before you attempt any of the things we talk about in this podcast.

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