Has anyone ever heard of a search fund for RE developments?

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October 24, 2019

by a searcher from University of California, Berkeley in Los Angeles, CA, USA

The idea would be to use the search fund to finance the pursuit of land for a very specific type of development applicable to a specific market. Essentially, syndicating out a portion of the GP platform to search fund investors. Anyone heard of anything like this in the search fund community specifically? Obviously, a different risk profile, but I think the structure would be similar - search fund pays for pursuit costs and entitlement (like funding the acquisition search), then capitalizes the deal for vertical construction (like funding the actual acquisition).

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Reply by a searcher
from Northeastern University in Bloomfield Hills, MI 48304, USA
I have done similar deals in the past but it really depends on the capital providers. You have to find investors with a particular background and risk profile that will invest in this kind of deal. Typically they will be in the real estate space themselves and be able to underwrite the deal personally to see its value. I haven't heard of funds investing in this sort of platform though only individual investors.
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Reply by a searcher
from University of California, Berkeley in Vienna, VA 22180, USA
There is a similar concept for commercial real estate investments, the term is syndication. I would be happy to discuss with you further. BiggerPockets is a great resource, I recommend using the term syndication and your criteria such as asset class and location. Be as specific as possible as there is a ton of information on that site.
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