Real Estate Limited Partners (LPs) have a big challenge: increasing quality deal flow is inefficient and expensive. Pursuing new contacts, expanding operator networks, and hunting down investment opportunities is cumbersome, manual, and resource heavy. The process is inefficient but necessary.
In most cases, the same amount of time is spent on pursuing a $15 million asset as a $115 million asset. So opportunities are overlooked, not because of return profile, but because of the deal size.
Because of this, opportunities are missed.
LPs live and die on the quality, diversity and growth of their networks and deals to which they have access. The greater the exposure to high-quality operators and the deals they bring to the table, the greater the potential success of an LP.
Why should one of the most important aspects of a successful LP come at such an enormous cost?
Recent Regulations Open Up Efficient Access to High-Quality Deal Flow to LPs
Legally, the expenditure used to be a necessity. The effort to increase access to best-in-class deal flow was a regulatory requirement. It entailed a primary reliance on social channels, word of mouth, broker networks, and use of pre-existing relationships to communicate deal flow from operators to potential investors.
This is no longer the case as a result of Title II of the JOBS Act, lifting the decades-old ban on general solicitations. The legal framework has changed, opening up new ways for accredited and qualified investors to gain efficient access to wider networks of outstanding operators and institutional quality real estate offers.
Missed opportunities become a thing of the past.
RealCrowd is an online commercial real estate investment platform that establishes quality operator/developer networks, as well as providing the tools to help them thrive. The RealCrowd platform functions as an open marketplace for operators, Limited Partners (and other qualified investors) to directly communicate, invest, and transact.
For Limited Partners this means fewer resources allocated to tracking down operators with the deal flow that best fits a given strategy or portfolio model.
Current and past offerings include cashflowing office, industrial, retail and multi-family investment properties from coast to coast. The average deal size on the platform is $23M and span the nation from office buildings in San Francisco, large apartment complexes in Colorado and Arizona to office and retail buildings in the Washington, DC area.
To date, RealCrowd has facilitated the successful funding of over $235M in deals through its platform, with diverse offerings currently in the funding process. These include a portfolio of multifamily properties in Mobile, AL., an apartment community in a high-demand, “Main-and-Main” location in Reno, Nevada., and an opportunistic industrial development in Los Angeles.
LPs, like all qualified investors, are charged nothing to access, use or invest in offers on RealCrowd’s platform (operators themselves pay the small premium for use of RealCrowd’s investor and transaction management technology). The full benefit of a deal’s potential return is reserved entirely for the participating investor.
LPs also benefit from more variability of initial investment outlays. Minimum investment amounts are set by operators on a deal-by-deal basis, providing investors with more control over allocation based on geography or product type.
RealCrowd erases the enormous cost of accessing high-quality deal flow. Limited Partners on RealCrowd’s platform do less work finding and maintaining a connection with excellent operators and institutional-quality offers, obtain tighter control over portfolio allocation and diversification, while netting the full benefit of potential returns in the process.