How To Run A Syndication That Is Built To Benefit Limited Partnerships With Amit Kapur

As CEO of a $15 million private equity fund, Amit developed a financial model that disrupts the traditional fund structure by eliminating management fees and yielding industry-leading returns. During his MBA at Kellogg, he developed a passion for freelance consulting, where he leverages his extensive experience in valuation, financial forecasting, and complex capital raises. His client base ranges from startup founders to CFOs of large companies.

This show is with Amit Kapur who is running development projects through a syndication in Chicago. He started his own fund that started growing through word of mouth. Once that started growing in interest he decided to formalize the process. Went back to Northwestern and got his MBA focused on finance and grew his database of investors and the fund snowballed from there.

Don’t Forget To Reach Out To Amit Kapur:

Contact Info: amit.k@ramagroupint.com

Quotes

"There is no real way to understand business until I took really deep dives into already successful businesses."

"The word success is a loaded word in my opinion. I can introduce you to a lot of people that have made a lot of money aren’t successful because they don’t have balance and happiness. Success didn’t attract me, it was the ability to make a difference and while making that difference being visible"

"A lot of people want to be a part of real estate development, not everybody has the time or the expertise or the bandwidth to handle such a structure"

"Expand your horizon but in a manner that is conducive and in concert with your resources.”

"Don’t do estimates. You have to know your numbers airtight and you have to account for your numbers being completely wrong. ARV’s are tricky because they are a moving target."

"Focus more on revenue driven asset classes. Shifted quite a bit on the notion of development from SFD to multi family, hopefully at price points individual investors can come in on."

“Grew our capabilities with our resources versus chasing resources to match capabilities.”

Concepts

•Real estate is a tangible asset. It has leveraging capabilities and it always has an inherent amount of value in it.
•Focus is on transparency. So the transparency is directed to a single project and they have a pro rata share of the ownership of those projects.
•We are the only real estate fund in Chicago that does not take any sweat equity. There is no GP split, there is no waterfall split. Your investment stake is what the profit you take is based off of.
•Focus on short term goals and look at things granularly and step by step.
•Difference in theoretical knowledge vs real knowledge. Instead of taking the risk with theoretical knowledge let somebody else take that risk and rely only on realized information. Especially at the start.
•We try to focus on areas not necessarily where values are today but they will be there in a year or two. So looking into B+ to A- areas that will turn to A-/B+ areas.
•Expanding buyer base and supplier base puts them in a position to fight macroeconomic issues.
•I would say from a mindset perspective think small before you think big. If you think big too quickly it can be really heavy and demotivating.

Time Stamps

0:00 - Introduction
1:00 - Craziest transaction, includes specific details about due diligence period.
5:00 - Origin story. What draws you to real estate?
8:08 - Summary of origin story Success is a loaded word lots of people make money but don’t find happiness/balance.
9:00 - Success didn’t attract me, it was the ability to make a difference and while making that difference being visible
10:00 - Challenges he faced
14:27 - Covid Challenges at one point lumbar was up 4000%
16:00 - How the fund is structured. Non GP structure
19:30 - Matt dives deeper into the structure and how it works.
23:00 - Matt asks question based on the unique structure of the model
25:00 - What type of returns have investors experienced in past project
27:00 - Why the fund took a hit.
27:45- Buy and hold part of the hold buying properties for short term rentals airbnb
28:20 - You give ownership so they share equally in depreciation and cross segregation of these projects.
29:50 - Exit strategies and how long do you hold?
31:10 - Transitioning to mindset
36:00 - Why is building new construction easier than rehabbing?
39:00 - Gets into Chicago details
40:30 - Things somebody should be careful of
44:30 - Difference in theoretical knowledge vs real knowledge
47:00 - Talks about versatility in the current market. How are they adjusting for a potential downturn?
51:00 - Market factors
52:00 - What is your vision for the next 12-18 months?

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