How to raise capital in uncertain times? In this Expert Insight Interview, Jonathan Tuttle discusses ways to raise capital in a challenging economy. Jonathan Tuttle is a Fund Manager and Head of Acquisitions at Midwest Park Capital, a real estate investment firm.
The interview discusses:
- Lack of in-person events
- Different ways to access capital
- Passive Investment
Not having the ability to schedule a face-to-face meeting nor attend a trade show is a significant disadvantage to closing deals and networking. People are getting used to doing all parts of the business virtually, but having a Zoom meeting is not the same as having a business dinner. However, we can still try to use the technology to our advantage as much as we can.
Ways to Raise Capital
One way for raising capital that became quite popular in recent years is a single-family office. The single-family office handles wealth management for a high profile family whose net worth is about $50 million. The whole team, from lawyers to tax accountants, focuses exclusively on the wealth of one family. These business deals are usually partnerships, but the family sets the rules and decides the check amounts. You can expect between one to five million dollars check.
If you want to raise more than one to five million in the capital, a family office might be a better solution for you. Family offices handle the wealth management for families whose net is above 100 million dollars. These partnerships follow a four to five years private equity model.
Many people are advocates for passive investment. One way of passive investment is investing in mobile home parks. As the cheapest way of housing, mobile homes are a solution for many people who lose their jobs or experience financial hardship during the economic downturn. Moreover, many baby boomers are about to reach or already have reached their retirement years. Thus, they will start to sell their houses and down-size to either retirement centers, apartments, or mobile homes.
Buy-in for this type of investment is about $50,000. It is on the 15 years depreciation schedule, comes with tax benefits, and usually offers a quarterly payout. You can sell it at a higher value later on or refinance it. This investment does not require you to learn the business because there is a team of experts that takes care of everything. You write the check and start to enjoy the benefits of investing in real estate.
John is the Amazon bestselling author of Winning the Battle for Sales: Lessons on Closing Every Deal from the World’s Greatest Military Victories and Social Upheaval: How to Win at Social Selling. A globally acknowledged Sales & Marketing thought leader, speaker, and strategist. He is CSMO at Pipeliner CRM. In his spare time, John is an avid Martial Artist.