One of the advantages of running an investment group is that you get to meet a lot of interesting people, while also discovering many investing opportunities. My one buddy who used to run the meetings with me not only became a pretty good speaker, but he also became good at raising private capital. He had a good personality, he was very trustworthy, and he did what he said he would do.
In the beginning, we were just raising private money to do small real estate deals. In fact, I probably did more lending than borrowing. But it wasn’t long before we started raising money for larger investing opportunities. At first, we were raising money for commercial office condos and pools of notes. I pretty much stayed in the note space, but my buddy morphed into student housing, and although we’ve taken different paths, we’ve both done pretty well.
When Opportunity Knocks
At the time, we were entering the downturn, and it was tough getting banks to refinance rehab properties, so the timing to enter the student housing market was good. Residential lending was getting so strict that the only loans they wrote seemed to be FHA, owner occupied loans. If you were a self-employed borrower, just forget about it.
It was also perfect timing, as a large university in the Philadelphia area was expanding quite rapidly and didn’t have enough off campus student housing to go around, and my buddy recognized the opportunity.
Having a Plan
At first, my friend started to assemble his team. Since he was previously a lender, he was smart enough to be constantly meeting with bankers to test the…