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Raising Private Capital: Building Your Real Estate Empire Using Other People's Money

Narrated by: Randy Streu
Length: 6 hrs and 27 mins
Categories: Business, Career Skills
4.5 out of 5 stars (3 ratings)

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Summary

Raise more money (other people's money!) for your next real estate deal with the practical tips and techniques in this audiobook! 

Are you ready to help other investors build their wealth while you build your real estate empire? The road map outlined in this book helps investors looking to inject more private capital into their business - the most effective strategy for growth! Author and real estate investor Matt Faircloth helps you learn how to develop long-term wealth from his valuable lessons and experiences in real estate: Get the truth behind the wins and losses from someone who has experienced it all.

Whether you’re a new or seasoned real estate investor, you’ll discover new ideas and motivation while learning a detailed strategy to acquire, secure, and protect private money in your first - or next - real estate deal.  

  • Private money?partners?in places?you?didn’t know existed?? 
  • The prerequisites needed to start raising money 
  • How to structure debt and equity deals and when to use each strategy 
  • The best way to provide win-win deals to all money partners 
  • How to protect all parties involved in a private money?transaction?? 
  • Proper private equity exit strategies 
  • And so much more! 
©2018 Matt Faircloth (P)2018 BiggerPockets Publishing

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Profile Image for caroline addis
  • caroline addis
  • 21-09-18

No Fluff, just solid, experience-based advice!

First, let me qualify my comments by saying that I am not an unbiased reviewer. I have known Matt for a few years through the South Jersey REIA. He and his wife, Liz, have always proven to be helpful in sharing real estate expertise. Matt brings a very positive and professional approach to relationships and his real estate business. I chose to listen to the audio version of Raising Private Capital so that I could take notes. By doing so, it helped reinforce the content. The book is well organized and the narration was quite good. As a former banker, I found the description of the sources of financing, structuring of deals and the pros and cons of different types of cash providers to be well defined. Matt’s experience with many property types (from single family houses to 198 unit apartment complex) gives him a foundation to share valuable insights and offer advice. He’s the real deal!

Matt toughed-out the down turn in 2008 and applied lessons learned to improve his investment business. I was surprised to learn how he was able to overcome a significant financial set-back that occurred when a 1031 Exchange Intermediary defrauded him of $700K on one of his most profitable deals. His sharing of knowledge is not done in a boastful way, but he humbly explains how his philosophy on life has shaped his approach to business. Matt emphasizes that real estate investment is a marathon, not a sprint.. He advises the reader to lay the groundwork with solid education, taking “personal inventory,” developing a track record and creating a one page business plan (with lots of contingencies). Matt stresses the importance of systems, building relationships, giving back to help others and, most importantly, “be respectful of investors’ money.” Matt will go to all lengths to make investors “whole” even if it requires him to reach into his own pocket to cover the deficiency.

He illustrates the various types of investment vehicles and provides “case studies” for explanation. Matt’s keys to success include three important elements: always under promise / over deliver; keep regular communication channels active with cash providers; and show passion. He advises the deal maker that his success has resulted from “falling in love with this business.”

Chapter 5 covers Where to Find Cash Providers. Matt outlines a “Cash Provider Pyramid” with three tiers. First, focus on the “core group” of friends and family, sharing successes with them and social media. Begin making your “master list” by educating that group on uses of retirement accounts and other assets to invest in real estate. Tier 2 is comprised of referrals from professionals in the industry, educational events and social circles. Tier 3 entails taking deals to the public. Matt outlines 7 paths to access people who may not currently be aware of the “opportunities” that you could provide to them. He reminds the deal provider that “we are not asking for money,” but providing a service for those “who are looking to put money to work.” The reader should carefully review the 7 paths enumerated in Chapter 5.

Chapter 6 offers advice on Turning Potential into Reality. Here is where the “rubber meets the road.” This chapter is where Matt outlines the process and steps to implement a systematic approach to raising capital. He admonishes the deal provider to always be focused on the cash provider point of view - WIIFM (what’s in it for me) – and the importance on follow-up.

Chapter 7 discusses How to Structure the Private Loan. He addresses the questions to ask the lender, the process and documentation in securing financing as well as the potential pitfalls in structuring a loan. Matt advises the deal provider to carefully monitor all activity on the two most important transaction dates – Day of Purchase (Closing) and Day of Sale or Refinance.

Chapter 8 covers How to Structure Private Equity Deals, which involve passive investors. Matt outlines when to use different finance strategies. For example, the BRRR (Buy, Rehab, Rent and Refinance) strategy is typically used with deals having less than 10 units. These smaller deals, typically, have lower risk of downside and are often funded with equity. Larger deals will require some combination of debt and equity. These agreements can become quite complex and may involve several traunches. Some capital structures may have preferential treatment, such as in lien status or a sharing of profits after return of capital. Turnkey deals are described, where a property is fully rehabbed, pre-leased and offered as an investment to an equity cash provider. Joint Venture (JV deals) are covered with the appropriate financial structures. In JV deals you may not be providing the cash provider with a percent of ownership, but pledging a percent of net proceeds. This chapter also covers syndication and setting up an equity agreement. In essence, there are a myriad of ways to structure deals depending on the cash providers’ risk preferences and investment horizon. Also covered are the additional ways for deal providers to generate additional income – incentives and fees that may be performance based.

The final chapter, Chapter 9, Management, Exiting and Beyond addresses ways to manage the cash providers as well as strategies to exit deals. The loan or equity agreements need to clearly spell out the expenses under the deal (e.g., management fees and incentives) as well as how the net proceeds are calculated to determine a “profit split” with partners. Agreements should also clearly state how equity participants should be treated in the event of a desire to exit early from a deal. Tax implications need to be delineated so as to avoid negative repercussions for cash providers. Matt encourages deal providers to “think beyond the deal” to focus on who you want to serve and how to develop and foster those relationships. His last admonition is to always remember three guideposts: first, “they need you,” second, it is critical for deal providers “to treat cash providers’ money like a fiduciary” and three, “to play the long game.”

Well done Matt! Thanks for your knowledge, inspiration and friendship. Keep up the great work!

12 of 12 people found this review helpful

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  • P. Chaploutskiy
  • 18-10-18

A must read, if you start flipping

I started to listen to this book on Audible but quickly realized that I just have to have a hard copy
of it. It is loaded with practical detail, definitions, strategies, advice, and real life examples that
it's almost like a textbook on raising private capital in real estate, and, being a visual person, I
learn better from a hard copy of a textbook rather than an audio version.
Matt's book is especially excellent for those who are just beginning in real estate, as well as
those who have wet their feet a little but want to dive deeper into the waves. It contains basics,
such as descriptions of real estate debt and equity, but also goes into details, such as how to
structure private money deals and strategies how to approach cash providers. Matt is brutally
honest and open: he doesn't keep secrets from his audience and shares his tips and examples
from his own practice that can help other investors be successful.
Matt is an seasoned real estate investor whose experience you can trust. So many investors
share their success stories, write books, do podcasts and videos but they are yet to survive a
housing crush! So many of them started post-2008 downtown and have been swimming in the
calm waters of the booming real estate. Not Matt. He started before the market crushed and in
his book shares his experience with having to convert his short-term flips to rentals just to break
even. This is an invaluable experience that makes a real estate investor a legitimate one.
I highly recommend this book to others interested in the topic. I also recommend Matt's videos (I
found them on Youtube) and podcasts on Biggerpockets. I bet you will find his humorous
style, wisdom and honesty to be the perfect compliments of the “bigger individual” he talks
about in his book!

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Profile Image for Brizzle
  • Brizzle
  • 05-09-18

I had high hopes, but cant recommend it

I was initially excited to start this book but it quickly disappointed me. My main complaint is that there is no depth. It touches on a lot of topics but quickly moves through them without much discussion. I've listened to 3 or 4 books by Bigger Pockets publishing and this one was by far the least educational. I also found the narrator's style unappealing. This is the first book I have listened to from this narrator and probably wouldn't choose a book read by him again. I did force myself to listen to it in its entirety but ended up returning it. There are better real estate books to spend your 6.5 hours listening too.

4 of 4 people found this review helpful

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  • Kevin Wittenauer
  • 19-08-18

good listen

Very easy to understand and learn from. i recommend for any level of investor. Plain language

1 of 1 people found this review helpful

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  • Amazon Customer
  • 28-11-19

Great book on raising private capital.

Explains why it is needed, how to get it, and why it is okay not to be afraid to ask for other peoples' money.

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  • Christian Abbosey
  • 25-11-19

On point

I suggest you listen to this book if you’re looking to go into Real Estate investing. Highly recommended.
Though i am in West-Africa. The principles are almost the same. Thanks guys

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  • Andy Gilbert
  • 23-11-19

Investor Business Roadmap

Matt lays out the road map for purchasing your first property to deploying a high functioning, real estate enterprise. There’s much practical and sage advice throughout, which I found helpful toward thinking about my business strategy. Enjoy listening and or reading this one.

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  • Michael D
  • 02-10-19

phenomenal

phenomenal! One of the best. Having been investing in SFR for many years and now moving into apartment acquisitions this was a winner!

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  • Caleb
  • 21-08-19

Well done!

I enjoyed it. This book was detailed and clear from start to finish with minimal fluff.

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  • Jonathan McGovern
  • 02-06-19

Outstanding Information

Some authors get lost in their own story and forget to teach the reader the technical aspects of how they did it. Matt Faircloth strikes a nearly perfect balance of inspiration and information. Great read!