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The Only Real Estate Fund Manager’s Handbook That Has $600 Million in Research & Development Into It.

Here's what those investors wish they knew beforehand.

Salvatore Buscemi Image

Raising Real Money:

The Foundation Handbook for the Aspiring Real Estate Fund Manager

5/5

5.0 out of 5 stars Very, very Helpful!!
Reviewed in the United States on July 28, 2017
Verified Purchase

“This book has given me another and much better site for the future of my deals, company and the method of been a honest private lender with greater governance practices and processes. Well put together book and a wealth of information!” JULIO’S FIRE, Amazon

These Chapters Cover:

How to structure your real estate equity fund raises the correct way for each transaction type and real estate asset type. So you don’t have to overpay attorneys to research for you.

Fund incentive structures such as catch-up fees, promotes, waterfalls and management fees. So you can explain to your investors how beans are divided and how and when they get paid.

How to start up you emerging real estate fund: expenses and how and when the Fund Manager recaptures those expenses.

How to operate your fund: P&L, manage conflicts of interest, distribute proceeds to limited partners, and use unbiased
third-parties to keep you from making avoidable mistakes.

What are internal controls, governance, reporting, and investment committees. So know the answers in advance to the questions
and look like you’ve been here before.

Your Fund’s Lifetime: how deal with investor redemptions, perform orderly liquidations and how to wind it down. So you know the exit plan before getting married to your investors.

The tips, tricks and traps of fundraising, complete with a
90 Day Plan For Action. So you can get started today without
any hesitation taking advantage of the coming commercial
real estate crisis.

Once You Understand Real Estate Equity Raises, 

You Will Never Go Back To Development or Construction

His father was a self-made guy who saw the potential for development on Wacker Drive west of the Loop in the late 1950s and started buying older buildings, many on sites where gleaming office towers now stand. 

He came to Chicago after going to Harvard Business School (HBS) and landing in the Midwest, because his wife Naomi, an only child, didn’t want to move to New York City. 

His son and close friend, Richard sets the scene for us by explaining that when his father got back to Chicago, HBS didn’t mean a whole hell of a lot to anybody. He wanted to be in investment banking, but the truth was, there were only two real investment banking companies in Chicago that mattered, William Blair and Chicago Corp, and they did primarily Rust Belt-type deals.

Richard continues with the conundrum his father faced: He was very entrepreneurial, and the only thing that was entrepreneurial where you could hang your shingle in the Midwest was really real estate.1

 

The Next Part Of Richard’s Story Is A Lesson Many Wealthy Families Learned The Painful Way In 2008 After Losing It All During The Great Recession

                                                                                                 

Have you ever wondered why some investors go broke and bankrupt no matter the market cycle, but others continue to grow and scale? 

Have you ever thought of becoming a developer or merchant builder?

What do equity raises look like in practice in the real world? Especially around buying distressed assets in the coming market cycle, such as non-performing loans, commercial and residential property, and other asset classes. 

Have you ever wondered where the real money and prestige are in commercial real estate investing?

Did you ever realize how you’re going to evolve as a professional real estate investor – perhaps from a home-flipper to something more prominent so they can respect you with their money?

Why It Was Written

My second book here, Raising Real Money: The Foundation Handbook For Aspiring Fund Managers was first written to scare wealthier investors into not becoming real estate developers, who were lured to the cruel Darwinian quicksand of low interest rates and easy credit. These were the same people who had recently had large exits – which immediately placed 7-9 figures in their bank accounts.

I wanted to show them why they should be equity investors in real estate partnerships operated by world-class managers and operators – rather than to take on leverage, interest rate risk, operating risk and of course, headline risk doing development. 

The same things that kill many emerging families who are looking to try their hand at something else. It was to answer “well, then what do I do next then?”

And it was also to attract and condition newer investors to our consortium. It was gifted to my wealthiest investors to court them for their money as part of the capital raising process. But also, to impart to the lesser sophisticated a handbook to follow that would keep them out of trouble and force them to focus on what their less fortunate and incredibly impulsive peers had done wrong in 2008. 

After my first book, Making The Yield: Hard Money Lending Uncovered broke records on Amazon, I had to republish and release this book to include some way of interacting with my readers. I had to reprint this latest edition where to put my contact info into. Frankly, they were tired of playing my secretary involuntarily.  

 

 

What You Will Learn

This two-part handbook explains what you’re expected to know before taking anyone’s investment. 

Let’s get to it. 

Section 1: A Crash Course In Real Estate Funds

Open, Closed and Everything in Between

The most common types of real estate funds today are defined and differentiated. 

An overview of the investment structures used, such as joint ventures vs. classic limited partnership structures. So you can decide if you want to take on operational risk or just balance sheet risk by just writing an equity check. 

Fund Set Up

Which proper legal entity structure to use, and how it’s matched to your financial model. 

 

Explanation of gates, fund duration, redemptions, and timelines so you can communicate to your investors where their money goes and how it goes back to them.

How The Beans Are Split: Incentives and Management Fee Structures

Who gets paid first and when? How incentives and payouts are calculated: waterfalls promote structures and carry structures. 

How to manage cash flow and treasury functions: asset-level fees vs. fund-level fees, so you can confidently calculate these for your investors and be regarded as an authority figure talking about something very few people can answer confidently. 

(Starting on page 37.)

Introduction to Discretion and Good Decision-Making

Cocktail terms people love to say but have no idea what they mean, such as “catch-up fees”, “clawbacks”, “crossed promotes”, “hurdles” and other “carrot and sticks” used to shape Fund Manager behavior.

Because you’ll need to be able to communicate to your securities counsel what to put in your documents now, rather than at negotiation time. 

 

Section 2: Raising Capital For Your Real Estate Fund

How To Raise Capital Systematically

 

The Art of the Sale: how to place the right faces in the right places, and the intimate details as to how these fundraising discussions and negotiations happen. 

 

And how to create your evergreened approach so you never violate the second rule of real estate again: Never stop raising capital.

Sourcing Capital the Smart Way

 

Why starting out with real estate is easier to lead off with for your first fund than most other asset classes such as cryptocurrency, commodities, NFTs or anything else. 

How to perform due diligence on your investors. Yes. Them too. 

And, how to manage your investors’ expectations and proper relationship management. Because not all equity is made equal; your mother-in-law’s money is more painful to lose than your own

Capital Raising Techniques

 

How to sell your business model to investors and the dog whistles used to close them.

Because you need to be taken seriously at the critical first impression. 

Your 90 Day Capital Raising Plan

 

Methods used to attract and persuade investor so you can follow a structure for consistent capital formation and introduction. 

How to build investor profile and how to pace them to invest with you. Because no one is going to give you their money without giving you their time first. 

Mistakes to Avoid When Capital Raising 

 

When and how to outsource your marketing for investors to placement agents and Broker-Dealers? 

How to carefully and thoughtfully allocate precious resources at the beginning so you don’t run out of time and money while raising your assets under management (“AUM”). 

Because understanding this will distinguish you as there are certain things you can’t outsource yourself when you’re starting out. 

The Role You Play Here as a Fund Manager

 

Overview of what leadership looks like, fiduciary responsibility, and why you should always put your investors first.

Because now your investors will probably never migrate to other operators or fund managers who will look inferior to them as compared to you…

How to Govern Your Fund

 

What is expected of you, how to make the right decisions and implementing your Investment Committee.

Critical elements for managing your funds such as co-investment, reporting, side letters, key personnel and managing conflicts of interest. 

How to document Fund Manager indemnification, and removal, so you know the risks going into any partnership before you reminded of them later, but mostly so you avoid creating quarrelsome confederations that that will deadlock anything you try to do. 

Best Practices for Holistic Fund Governance

 

You’ll understand how to break down internal controls for governance, such as establishing privacy policies, and disaster recovery plans and how to create an orderly liquidation plan for your fund. 

Because, for no other reason, so you can make a statement to your fellow peers that you are a more discerning and distinguished investor who evolved and perhaps is more connected and influential.

(Starting on page 161.)

Who This Book Is For

This book, Raising Real Money: The Foundation Handbook for The Aspiring Real Estate Manager is for those opportunistic investors who see the coming distress and must raise capital. This book will save you hundreds of thousands of dollars in R&D in the form of other’s mistakes. 

Also, accomplished investors looking to build a legacy and for that next level of professional legitimacy by managing money carefully into private asset classes. You’ll understand a combination of different fund structures that most people without practical experience can talk about. 

If you’re an Airbnb operator, honestly this book should’ve sold itself by this point as you’ll need to be pooling private debt or equity to buy more product. Because how else are you going to scale your portfolio? 

Raising Real Money is also for successful white-collar professionals such as real estate attorney’s, ambitions accountants, and CCIMs looking to extend their influence into a well-constructed wealth creation mechanism for the mutual benefit of yourselves and your clients. 

Know-it-some MBAs who are looking to get that slight practical edge over their peers. 

And lastly, developers who don’t want to lay in a pool of their own sweat again. You don’t want to take interest rate risk, balance sheet risk, market risk, pledging your personal guarantees again and so forth. Besides, you don’t much time left for God to give you another cycle. 

This book isn’t for those who are looking to get rich quickly, or who have no real estate investing experience. 

Here’s How You Can Get Your Copy…

Just click the button or fill out the contact form on this page so I have your name and email address. This will tell me where to send your PDF and Kindle versions of my book so you don’t have to wait for it to arrive in the mail.  

Once you’ve completed Step 1, you’ll then be taken to a page where you can enter your shipping information, so I know where to send the book.

Unless you worked at a top tier investment bank in New York City, very few people know how these deals are structured. This is critical as your investor’s trust you, and you’ll be able to tell them with a straight face that “this is where your dollar investment goes, and this is how it comes back”. Now if only those fools on Shark Tank would learn this, perhaps they would get more funding…

Special Unreleased Bonus!

In addition to the coveted paperback version, and Kindle version that you can access immediately, I’m also going to be offering for the first time the full Audiobook and Audible versions too. 

Now you have absolutely no excuse not to listen to this masterpiece at the gym, on the plane, or in the car. Besides, research suggests that people who listen to audiobooks faster rate retain that content better.

There Is No Catch

Like all my other books, there is no hidden continuity program or anything such. My hope is that you’ll really appreciate this book, and this will really convince you to look at the investing world a little differently than your friends and peers do. 

100% Money Back Guarantee

I’m going to do something most bookstores would never allow you to do… I’m going to give you a full 30 days to preview this book. Read it cover to cover. Write notes in the margins. Use your favorite highlighter on it. Use it and abuse it. If you decide after all that time that it wasn’t worth the small investment you made, I’ll refund that investment and insist you keep the Audiobook and Audible versions for giving it a fair try. 

 

If you do return it, I’ll just re-sell it on Amazon for several times what you paid for it. 

Now I obviously don’t think you’ll need this guarantee, or I probably wouldn’t be this bold, but it’s there just in case there’s even the smallest lingering doubt in your mind…

Again, all you have to do is click the button or fill out the short form on this page right now. You’ll get instant access to the PDF and Kindle versions of this book, the bonus Audiobook and Audible versions, and the print version of my book will be shipped out shortly.

Again, even if you scribbled in the margins and highlighted it just send it back. It’s fine.

Here’s why: 

Because money in this business is a sign of conviction, and my books aren’t cheap for a reason. Just like my other books, over twenty years of a great track record and experience will not be found in the discount bin. 

Additionally, this business isn’t for everyone, and most people frankly don’t have the trust of their friends and peers to be able to raise money on their own.

So naturally, this wouldn’t be a good fit or, worse yet, may engage the wrong people to violate the trust of others, and I want no part of that. 

Just send it back, keep the audios as my gift for trying the book out. 

Again, all you have to do is click the button or fill out the short form on this page right now. You’ll get instant access to the PDF and Kindle versions of this book, the bonus Audiobook and Audible versions, and the print version of my book will be shipped out shortly.

The Investment Instrument of Immortals 

Now if you’re still sitting on the fence, let me give you a little taste of what you’ll learn when you get this book…

Now lean in, here’s a secret for you.

People on Wall Street know how to model anything – other than symmetric fee structure. I speak from experience. This goes beyond just charging management fees, but how you show the alignment of interest on the back end. 

When I set up Dandrew Partners Encore Ventures, I purposely changed the incentive structure, or carry, to show more of an alignment of interest with my investors. To do this, I told my investors they would have to make 200% on their invested capital before I would make a dime on any splits. 

When explained that way, subscriptions came in much faster. Everything after that was straight due diligence, no more hemming, and hawing or having to fight for attention. I immediately addressed what they were sensitive about upfront, in my own way. It was the hook I needed. Calls got returned much faster. 

I used it as a lead-in to those investors who I knew were sensitive and had been griping about this fund manager or that one ripping him off. “I should win a Humanitarian Award for this fee structure I created” is how I started the two-paragraph email I sent. Everyone has a fairness gene and a value system, and my job was to put it into a financial structure.

Today, our direct investments use a variety of similar structures that have been developed to be fair, using a combination of flat rates and sliding scales, some with expense caps. The secret? Make it fair and easy to explain. 

Because the investor isn’t stupid, they’re your spouse. 

Time Is Of The Essence

Here’s why (again).

Since I’ve re-published this book, I’ve only ordered 1,000 copies of this book and my other books. They are packaged up and ready to be shipped now. 

In all likelihood, they will probably sell out almost immediately. 

Why? 

  

Because when I released my first book, it sold 4,500 copies in a few short weeks. Then the price went through the roof on Amazon as you saw, and the rest is history. So it’s simply a matter of supply and demand. 

And based on my experience re-releasing my other book, readers really do like going along and marking up the pages as they listen along. So that could be you. 

Oh – one more thing.

What Made The Difference?

Getting back to Richard’s father, Harvey M. Walken discovered that it was better to take a balance sheet risk – meaning writing a check for an equity investment rather than taking financial, leverage, and operating risk trying to do it yourself. Richard explains this as such: 

“So that’s why he went into real estate and ended up building a prolific real estate portfolio. But he was much more of an investor than a real estate developer. 

He never bought into the whole ‘be a merchant builder, build a big organization, and build this massive brokerage, development’ and so forth.” 

This is why he was always a very solid equity investor.

That is shown in the form of the various skyscrapers that line Whacker Drive to the Toronto SkyDome. Harvey also had a penchant for media, technology, and entertainment, and he had lots of friends in all these various industries. So back in the early 1980s after a string of successes up until then, there was Harvey’s opportunity, and where Richard starts to open the kimono a bit. 

“My father was from Pittsburgh, and there was a talk about the Pirates moving out of Pittsburgh and he didn’t want to see that happen. So, he got involved with a guy named Carl Barger, who was putting a group together to save baseball in Pittsburgh, and we kind of came in as really the largest individual investor, because two other families came in.”

And that is how the real estate families became the founding investing families into professional sports.

(Another) Insurance Policy That Protects Your Reputation

Any aspiring real estate entrepreneur who is sincerely interested in evolving as a professional real estate equity fund manager will listen to or read this book several times before they accept a dime of other’s money. 

It’s a valuable book, but it’s not free for a reason – to separate from the mass of untrustworthy flakes and wannabes from those grownup men and women who are asking themselves: “where am I going to be ten years from now?” 

Because free advice from ignorant amateurs is far more expensive. Just ask your brother-in-law.

Best,

Sal

 

 

 

PS. For my fellow eavesdroppers who just skip to the bottom of the letter, here’s the deal: I’m mailing you a 180-page Owner’s Manual to starting and operating your own real estate private equity fund. This handbook is $47.00.  This is a very limited offer as I only ordered 1,000 copies of the book and they are packed and ready to be shipped.  Because the last time I released a new book, it sold 4,500 copies in a few short weeks.

 

The Audible, Audiobook (MP4s), Kindle, and PDF versions will all be emailed to you immediately. 

 

There is no “catch” to this offer. You will not be signing up for any “trial” to some monthly program or anything like that. 

 

In fact, if you don’t like the book, let me know and I’ll buy it back from you. Just keep the Audible and Audiobook versions as my appreciation for trying this out. 

 

Click here and claim your copy now. You won’t regret it. 

 

Don’t let another down-cycle or recession in real estate pass you by again. Get the book that can change your professional identity immediately – and put you in a far different place even 12 months from now.  

 

Again, this only works if you’re wearing the right clothes to this party and know what is expected of you. 

 

1 Actual story from my 3rd book Investing Legacy: How the .001% Invest

 

Click here to add this one to your library so you know which investor to profile for your fund structure.