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48 Stacked Townhouse Development Just Got Better
We recently negotiated with the municipality to build them a new municipal road next to our property. The result is that we now have more land to work with on our site. We'll be building a new playground, adding more greenspace, parking and 4 additional units! Not to mention potential tax breaks and DC discounts for building the road. Our project just got even more interesting. Come learn more about our deal tomorrow night, 8pm EST: https://mailchi.mp/biosisrealestate.com/james-st-webinar-info
Booking Investor Calls
I've had a few people looking to invest reach out, but refuse to schedule a 1 on 1 call until I have provided more information on the types of offerings we have on the go. I have some 1 page offering summary docs I could send, but is there a better way to provide them with the info they are requesting while also getting them to commit to a face to face?
How do you decide on the equity split in a real estate deal?
Deciding on the equity split in a real estate deal means figuring out how to divide ownership or shares of the property among the people involved. ​ Here's how it's usually done: ​ 𝟭. 𝗠𝗼𝗻𝗲𝘆 𝗘𝗮𝗰𝗵 𝗣𝗮𝗿𝘁𝗻𝗲𝗿 𝗕𝗿𝗶𝗻𝗴𝘀: One big factor is how much money each person is putting into the deal. If one person is investing more money, they might get a bigger share of the ownership. ​ 𝟮. 𝗞𝗻𝗼𝘄𝗹𝗲𝗱𝗴𝗲 𝗮𝗻𝗱 𝗘𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲: Sometimes, people bring more than just money to the table. They might have special knowledge or experience in real estate that's valuable for the deal. In that case, they might get a larger share of the equity. ​ 𝟯. 𝗣𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝗥𝗶𝘀𝗸𝘀 𝗮𝗻𝗱 𝗥𝗲𝘁𝘂𝗿𝗻𝘀: Real estate deals can be risky, and they don't always make money. The people involved need to think about how much risk they're taking and how much they could make if things go well. This can affect how the equity is split up. ​ 𝟰. 𝗢𝗽𝗲𝗻 𝗖𝗼𝗻𝘃𝗲𝗿𝘀𝗮𝘁𝗶𝗼𝗻𝘀: It's really important for everyone involved to talk openly about what they want out of the deal. If someone wants a bigger share of the ownership, they need to say so and explain why. ​ 𝟱. 𝗦𝗼𝘂𝗿𝗰𝗲𝘀 𝗼𝗳 𝗘𝗾𝘂𝗶𝘁𝘆: Where the money is coming from can also matter. If it's from friends and family, that might affect the equity split differently than if it's from professional investors. ​ 𝟲. 𝗙𝗮𝗶𝗿𝗻𝗲𝘀𝘀: The most important thing is that the equity split is fair to everyone. That means taking into account how much each person is contributing and what they're hoping to get out of the deal. ​ In the end, deciding on the equity split in a real estate deal is about finding a balance that works for everyone involved and gives each person a fair share based on what they're bringing to the table.
How do you decide on the equity split in a real estate deal?
0 likes • Mar '24
@Dami Fadipe thank you, that's similar to what I had been considering. It sounds like the land owner converted the appraised value of the land into LP equity, and then got a share of the GP based on the additional capital Raise. Do I have that right?
0 likes • Mar '24
Ok, I think that's where I'm a little unclear. The very definition of a "JV" partner means that all partners are active, which would imply giving them part of the GP as well as converting their land into LP units. I don't see that being desirable for either party unless there is an active component on the part of the land owner (due to the increased liability). On the other hand, if I were the land owner, I'd want some kind of say around what get's done with my land, and some sort of assurance if the deal goes south that I could either get compensated for my land value or regain ownership. When you were dealing with this land owner, did they have a similar concern? If so how did you address it (other than having them participate in the capital raise)?
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Samuel Herschorn
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1point to level up
@samuel-herschorn-9486
Licensed Architect and real estate developer. Transforming underutilized properties into massive value for investors.

Active 2h ago
Joined Feb 15, 2024
Ontario
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