When Capital Raisers Get It Right

03/11/25 • 44 min

The Real Estate Market Watch - current events through a real estate lens.

Capital Raising and Deal Structure Amanda Larson, founder of AMA X Equity, has raised roughly $2 million in investor capital since going full-time as a real estate capital allocator a little over a year ago. She specializes in multifamily syndications, sourcing deals, conducting due diligence, and structuring investments. In one of her largest transactions, the $31M acquisition of The Darby at Steeplechase, she played a key role in securing the deal, structuring the business plan, and signing on the loan. The total equity raise was just under $20M, with multiple sponsors contributing capital. Role in Deal Execution Amanda’s process starts with sourcing deals through broker relationships, conducting due diligence, underwriting, and assembling a sponsor team. In the case of The Darby, she worked with Disrupt Equity, a Houston-based sponsor group, to close the acquisition. Although Disrupt Equity led the project, Amanda was part of the GP team, securing a share of the 20% GP split rather than participating in a fund-of-funds model where capital allocators typically take a cut of investor returns. Underwriting Rigor and Risk Management A key differentiator in Amanda’s approach is her engineering mindset, which she applies to underwriting. Unlike some capital allocators who simply rebrand and distribute sponsor pitch decks, she conducts independent underwriting and due diligence, verifying financial assumptions before bringing investors into a deal. She has learned to be particularly cautious about floating-rate debt, having seen firsthand how misplaced confidence in interest rate stability led to market turbulence. Raising Capital and Investor Relations Amanda primarily sources investors through LinkedIn and business networking events, leveraging her background in the oil and gas industry to connect with engineers and professionals seeking diversification. While she initially focused on operations and underwriting, she has recognized the importance of marketing and investor education, adapting her LinkedIn content to be more personal and engaging. Lessons Learned and Market Outlook Her biggest lesson? Don’t blindly trust the smartest person in the room. She observed many seasoned operators confidently taking on floating-rate debt, despite clear risks, because the consensus among experienced sponsors was that rates would stay low. Additionally, she remains skeptical about the fund-of-funds model, noting that while it provides flexibility, it may be flooding the market with underqualified capital allocators who lack real estate expertise. *** Explore the world of real estate capital allocators—a fresh approach to financing that’s reshaping the industry. In this series, I talk with allocators, investors, sponsors, and service providers to give you an inside look at this fast-growing space. PLUS, subscribe to my free newsletter for real estate investors and gain access to: * Introductions to sponsors, allocators, and investment opportunities. * Insights drawn from my 30+ years of experience in real estate investing. * Hacks and tactics for raising capital to help you scale your real estate portfolio. Visit GowerCrowd.com/subscribe

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$20 Million Raised on LinkedIn!

Capital Raised and Deal Structure Dr. Raj Venkatramani, a pediatric oncologist turned real estate capital allocator, has raised approximately $20 million from investors, 95% of whom are doctors, since launching REIDOC Capital in 2021. His typical deal size ranges from $10 million to $30 million, and on average he raises $2 million per deal. His primary focus is on multifamily properties of at least 100 units, targeting Class A and B assets and new construction projects, rather than Class C properties, following hard-earned lessons from the market peak in 2021. Leveraging Group Capital for Better Returns Dr. Raj secures better economics for his investors by leveraging group capital. While a typical syndication might offer a 15% IRR with a 6-7% preferred return, Raj pools investors together to negotiate, for example, an 80/20 split (instead of 70/30) and an 8% preferred return, effectively increasing investor returns without requiring larger individual commitments. Underwriting and Market Lessons His underwriting philosophy is focused on analyzing sponsor assumptions, particularly around rent growth projections, occupancy expectations, expense growth, and debt structure. He talks about how bad assumptions can make a weak deal look good, citing an early investment in a Class C Florida asset where insurance costs doubled (from $196K to $400K in one year) and variable rate debt wiped out NOI. Transition to Ground-Up Development Raj expanded the kinds of deal he invests in from value-add to ground-up development and now partners on new construction projects in Sioux Falls, South Dakota, a market he believes is undervalued. His due diligence process before partnering with a sponsor involves a multi-year vetting process, meeting them at conferences, reviewing past deals, and even visiting completed projects before committing capital. LinkedIn as a Primary Investor Source Perhaps most surprising is how he sources capital: 90% of his investors have never met him in person, and nearly all were acquired through LinkedIn and referrals. His LinkedIn strategy? Post consistently for two years, even when people don’t engage, until they reach out ready to invest. Key Takeaway: Trust but Verify His biggest lesson? Trust but verify—real estate is not medicine, where all parties have the same goal. Misalignment of incentives is real, and capital allocators must be rigorous in due diligence to avoid costly mistakes. *** Explore the world of real estate capital allocators—a fresh approach to financing that’s reshaping the industry. In this series, I talk with allocators, investors, sponsors, and service providers to give you an inside look at this fast-growing space. PLUS, subscribe to my free newsletter for real estate investors and gain access to: * Introductions to sponsors, allocators, and investment opportunities. * Insights drawn from my 30+ years of experience in real estate investing. * Hacks and tactics for raising capital to help you scale your real estate portfolio. Visit GowerCrowd.com/subscribe

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The #1 Mistake Investors Make in CRE

My guest this week, Chris Borden, thought he was heading for a quiet retirement after stepping down as CEO of a multi-billion-dollar grocery chain. Instead, he found himself on a fast track to becoming a real estate investor and capital allocator. What started as a few rental properties evolved into capital deployment, including a $5M+ debt fund and co-GP positions across thousands of multifamily units. Through Rise Capital Investments, he’s working with investors to generate steady returns while navigating the complexities of debt and equity investments. Building a Debt-Focused Investment Model Chris structured his fund to prioritize debt, specifically first-lien lending. His looks to provide a steady income stream for investors with reduced volatility. By carefully selecting borrowers and structuring loans with conservative loan-to-value ratios, he’s built a resilient portfolio that has successfully been generating consistent returns. The Art of Capital Allocation Chris has also established partnerships with sponsors he has co-GP’d with on multifamily and commercial real estate opportunities, leveraging his investment club model that allows investors to pool capital and participate in opportunities he sources. Lessons from a Shifting Market The past year has been a test for many investors, and Chris’s experience is no exception. With several equity deals pausing distributions due to rising interest rates, he’s seen firsthand the importance of working with strong sponsors, maintaining liquidity, and ensuring portfolio diversification. His biggest takeaway? Relationships matter more than ever - especially when times get tough. Mastering the Investor Game So where does Chris find investors? Forget paid advertising on social media, Chris’s most successful networking for investors come from LinkedIn, local real estate meetups, and other in-person groups. *** Chris’s journey is a masterclass in adapting to market conditions, mitigating risk, and making real estate work on your own terms. If you want to learn how to navigate debt, equity, and capital allocation like a pro, this is an episode you won’t want to miss. *** Explore the world of real estate capital allocators—a fresh approach to financing that’s reshaping the industry. In this series, I talk with allocators, investors, sponsors, and service providers to give you an inside look at this fast-growing space. PLUS, subscribe to my free newsletter for real estate investors and gain access to: * Introductions to sponsors, allocators, and investment opportunities. * Insights drawn from my 30+ years of experience in real estate investing. * Hacks and tactics for raising capital to help you scale your real estate portfolio. Visit GowerCrowd.com/subscribe