How to Build Relationships with Investors (Family Offices, Ultra-High Net Worth)
It's a beautiful thing when priorities align between an operator and investor
Editorial: Relationships First, Capital Follows
This piece from
, shares a clear and timely message for real estate entrepreneurs: relationships come first.With over 20 years in real estate, development, and private equity, John knows what it takes to move from operator to owner. Through his newsletter The Lineup, he helps operators and family offices navigate private markets with clarity and connection.
At Build to Thrive, we’re proud to collaborate with John. Our missions align around one simple truth: sustainable growth starts with trust and shared priorities.
If you’re looking to grow, don’t just pitch. Build real connections.
Juan Salas-Romer
Are you starting out on a path to be a real estate entrepreneur? If so, this post is for you.
At a recent meeting with a friend, and subscriber, we discussed where he is in his career. He wants to move from managing real estate development projects to having an equity stake in those projects. He is not sure how to make the transition and he needs to build relationships with capital sources. Ultimately our conversation sparked this post since it’s vital to our focus on real estate entrepreneurship.
Why are relationships with investors absolutely key to getting out of the gate? Real estate projects are capital intensive.
There are a limited number of people who will invest with you when you begin on your own. You are an unproven entity. Sure you may have done deals internally at a large well capitalized shop, but where do you come up with the capital to do your own deals? That’s a tough question.
Many times access to capital is what prevents people from going out on their own. Don’t let it stop you.
How to meet investors
Connecting with investors can happen in a variety of ways. Below are three ways to get started so you can capitalize your real estate deals.
Non-Profit Organizations - Yes this is counterintuitive, but that’s why it works. Whatever you do, don’t just join non-profits to find investors. Find something you care about and support that cause.
First a quick story about how my involvement with a non-profit gave me access to people who invest.
I grew up in a middle class family that didn’t have a deep pool of investable capital laying around. I also care about developing high quality buildings, cities, and neighborhoods. It turns out everyone involved in the organization CNU New England feels the same way. So I joined the organization to better support their mission.
A few years into my time with the group I was asked to join the board of directors by the Executive Director. After being on the board, and building a good relationship with the director, I decided to go out on my own to develop property. I mentioned my new entrepreneurial venture to the Executive Director. And, since she is a natural connector, she introduced me to who is now my business partner and major investor. When he and I met we quickly recognized our shared priorities and, after a period of time building trust, a partnership was born.
If you think about what you are passionate about and engage with non-profits in that space, you might just meet someone who thinks like you. You might not, either way you still end up doing work on things that you genuinely care about. The relationships you build with people who share your priorities are the most authentic kind of relationships and that is who you want as an investor.
There are other easier ways to find capital partners. This one happens to be my favorite.
Other Investment Professionals - Another way to meet new investors is through their gatekeepers. All ultra-high net worth individuals and families have a team of financial advisors, accountants, and attorneys. If you know these people well and they know what you do and respect you, they will be happy to connect you with investors.
Again, building trust with gatekeepers takes time but it’s worth it and it’s about more than the money. You have to focus on building deep authentic relationships that are founded on trust and aligned interests.
Capital Markets Intermediaries - Finally, another way to find investors is to use capital markets intermediaries at large (JLL, Newmark, Cushman) or boutique shops.
My partners and I did this for an industrial deal in Boston. We capitalized a deal through the use of the capital markets team at Newmark in Boston.
First we tied up a profitable deal, then began the approvals process. Once we decided we wanted a joint venture partner, we contacted a friend at Newmark Tony Coskren. He brought in his team of professionals and they went to the market and found a partner for us. This allow us to capitalize a $50 million dollar deal that we couldn’t have done ourselves.
They did a great job and we have had the pleasure of building a good relationship with the joint venture partner. We share interests and continue to look at deals together.
How to Build Relationships with Family Offices & Ultra-High Net Worth Individuals (UHNWI)
When you start to look at who to partner with it is important to begin with your network. Talk to everyone and tell them about what you are up to and why your project or idea makes money. That’s the beginning. And if you already have family offices or investors with large balance sheets in your network, then you are all set. If not, you will need to connect with investors/partners who can help you fill out your capital stack.
In this post, for simplicity’s sake I am going to assume you are experienced. Whether it is through experience with large shops or with partners, you can parlay that into an investment by a family office or an ultra-high net worth individual (UHNWI). According to Investopedia those with more than $30 million dollar net worth are categorized as UHNWI. I have worked with both family offices and UHNWI and enjoy it. Because when you work with them it's a personal way to do business.
Its a fact, individuals and families with large balance sheets are looking to connect with experienced operators for new investments.
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