Empower your HighTech business with a Deal Flow CRM for HighTech

How to create outlook signature

hi I'm Sharon wiith a tax attorney active investor in your go-to resource for proven investment and tax planning strategies in this video I'm going to give you a really quick intro on finding good deal flow for alternative Investments what I mean when I say alternative investments in this case is investment funds so all types of investment funds from Real Estate funds or syndications to debt funds Venture Capital funds private Equity Funds any type of fund where you are a passive limited partner investor in in that fund so I'll start by telling you a little bit about what fund managers and sponsors do and how you should think about finding good quality sponsors and I'll give you some tips to watch out for so that you don't get yourself in trouble but I do want to start by saying that I do have a course that tells you my process for how to you know how I find good deal flow I highly recommend you check that out what I'm not going to do in this video is tell you what to invest in you should never listen to somebody who says this is an investment you should make you need to understand how to do your own research get a good pipeline for good quality deals how you can get access to those deals so if this is something that's relevant for you and you're an accredited investor or hire you know qualified purchaser I highly recommend you check out that course where you can understand my process and it's the same it's a process that you yourself can use as long as you're a credit investor you are you know welcome to to use that same process that I use so I want to start by telling you my most embarrassing story around making an investment in investment fund so when I first started I had no clue what I was doing and I decided you know real estate sounds great I don't want to go buy property so let me invest in a real estate fund so I didn't know what I was doing I didn't know anything about you know Finding sponsors I thought you know someone like me is just an average Jane how could I you know I ever find really good sponsors to invest with so what happened is is I read at some point my you know early in my entrepreneurial journey I read a book that was a life-changing book for me and it I just became kind of obsessed with it and that mentality so when I started reading you know all the other books that that author had put out and I started looking into the advisors that that author had used so that author had a bunch of advisers from Real Estate to CPA to attorneys and I started just digesting any information out there that anybody in that team or that network was was writing or putting out and I was really paying attention to one of the real estate guys and so I read a lot of his books I listened to his podcast I thought this guy is great he seems to really know what he was doing and I was amazed to find out he actually had a fund and I was even more to find out that I could invest in that fund so I thought this is great let me you know invest a bunch of money with this guy and you know how could this not turn out well so it was actually a really bad you know decision I didn't know what I was doing the fees that they were charging were astronomical they didn't have a good background they don't have a good reputation and it's clear that you know that the manager that fund has his focus elsewhere he's really more of an influencer than you know a fund manager so you know once I did find out a good quality process for how how to find good you know quality sponsors and good deal flow to invest in I was really embarrassed that I had made this first investment so I've never told anybody the name of the fund I'm still embarrassed to say it but hopefully by sharing the story with you I can help you avoid these samees mistakes so it's a rookie mistake a lot of new investors to investment funds make you hear a podcaster or YouTuber you know or someone you read a book or something and you think that you know this has to be good let me go invest with this person that's usually a bad idea and I'll explain more in this video later about why that is but to start with I want to explain that finding good deal flow is a combination of quality sponsors and good deals so you start with and I I dive into this in my course in in really big detail you start with step one finding good quality sponsors that you would invest with so what is a sponsor you know you may hear them referred to as sponsors fund managers they have a lot of different terminology but this is basically the team or person you know who puts the deal together and they're going to manage those Investments so you're a passive investor you don't make any decisions as far as what invest Investments the fund makes when they make them how they manage those assets if it's real estate you're you know you may know what your you probably know like what properties you're buying the or the funds buying but you're not going to really know about the day-to-day operations and you know what's taking place that's all handled by the the manager so the fund manager sets up manages the fund they Market the deal so they're the ones that pull in other investors so you and I and anyone else who wants to make an investment in that fund they go out you know arrange everything they're the general partner in the fund structure if you don't know what that is you know I I covered that more in my course and in other videos I have they decide what investments the fund will make so as I said if in a lot of cases it it'll be a fund where you don't necessarily know what they're going to what assets they're going to buy you you should know a strategy that the fund's going to undertake so in some cases you may know what properties are going to buy but usually with a fund where they're going to buy multiple properties you probably don't have any clue what what properties they're actually going to end up buying so they make all those decisions they determine when they're going to buy and you know when's the fund going to BU buy those properties when's the fund going to sell those properties they may manage the op you know the assets themselves on operation level so a lot of fund managers will have a property management entity that's separate where you know that entity is managing the day-to-day properties so they may you know you may buy an apartment building in Georgia for example and there may be a property management company that's owned by the same people who own the fund or who you know really the same team that's the sponsor they're in charge of managing the building itself you know getting new tenants and you know making doing renovations all that kind of stuff the DayDay operations so that's very common you know when if it's private Equity they may manage or have some active management in the portfolio companies themselves by having someone on the board or you know dictating who the management team's going to be in different ways but you as the passive investor you're not going to have any control over that so you are really trusting your money over to that sponsor or fund manager so that is why it's so important step one finding a quality sponsor don't make that mistake I did where you go after the the podcaster and you know invest in him if a good quality sponsor that's been doing this for a long time doesn't need to Market that way and they don't need to you know they're not trying to be an influencer you know they're they're not trying to do a lot of other unsavory things that this guy was doing and you know so you want to make sure step one you find good quality sponsors then once you find those sponsors you've got to then see what deals they have they will have deals that you can invest in in a lot of cases they have one or more deals a year so you just have to decide okay I like this this you know you don't ever just want to go with one sponsor you want multiple sponsors you know I invest with 20 probably different sponsors at least so you want to you know say Okay sponsor X that I really like they have you know these deals do I like those deals what are those deals do I want to invest in so you want to have your kind of bucket of quality sponsors and you want to be aware of you know what deals are available when they come up you know for for you to invest in I just want to end with a couple of tips so these are really words of wisdom from my own experience as well as my experience of working with other people and just kind of you know knowing a lot of people in the space so you know I'm very much in into with um you know the investor groups and you know who invested in in some of these bigger deals and stuff so this is based on my experience personally this is based on my experience talking to other people who do this a lot and based on my experience when I used to have a Consulting a tax consulting firm where I worked with clients that were doing this so friends and family a lot of people kind of invest or start with investing with friends or family this might be you know Cousin Bob comes and says you know I want to go buy an apartment building can you give me 100,000 bucks you know you and a couple others put some money in I don't do that I have a blanket no friends or family policy I personally only like to invest with really big quality sponsors that are big have been around a while you know have a proven track record so just be careful I'm not saying don't do it I would never tell you what to to invest in or what not to but just be very careful you want to be you know much more cautious with those types of Investments because it's an amateur right if they had access to a bunch of investors or a bunch of money they probably aren't coming to you so just be careful of that I only look at funds and I'm talking about investment funds you can anybody can go out and buy real estate property themselves I'm talking about investing passively through an investment fund those are always in my experience good quality sponsors always limit their investment funds to accredit investor so if you are not an accredited investor and you want to invest in a fund and you find something you know that allows you to invest in that I would be very cautious very weary I would do extra extra due diligence on that my course on this topic is limited to only in credit investors because I think it's useless if you're not at that level yet and that's okay if you're not you'll get there and when you are then take my course and you can start using that that process to find your own deal flow for funds but until you reach that level if there's an investment out there that's not that not limited to at least a credit investors a lot of Investments are limited to qualified purchasers only but if it's not at least limited to credit investors I'm not touching it that's my own personal opinion paid ads sometimes I see you know social media I'll get like Facebook ads for funds and stuff that are advertising I stay away from those sponsors a good quality sponsor shouldn't be having to do paid advertising they should have investors knocking at the door you know the best sponsors I know and that I've invested with and have a good quality track record they have no issues raising Capital they usually raise too much they actually have more of an issue of raising too much Capital that they have to turn people away so you know be very weary of that you know why are they having to do paid advertising why don't they have their own you know good investor base if they've been around and done a good job for their investors in the past crowdfunding platforms I know these are getting very popular like fun rise I don't touch these I you know I will say that the people I know who really understand this business agree with that you know thought that that these aren't good good quality sponsors aren't putting their deals on there so again I would be very weary of that and you know just I I wouldn't touch I have a blanket no crowdfunding platform policy be careful of unsophisticated groups so there's these things nowadays it's like really cool to be in an investor club or network so I know there's all these investor clubs popping up be very careful with that yes there are some really good investor clubs that can give you access to deal flow but there are some really really bad ones I have seen situations where you know you get these investor clubs that aren't very sophisticated and you've got you know that herd mentality where they all invest with the one sponsor and that sponsor is really bad I know investor clubs where they're mostly invested with a sponsor that is in really bad shape right now so you've got to avoid that you got to you know avoid those clubs where it's like a herd mentality where you know everybody in the club's investing with the sponsor that sponsor because you better hope that's a really good sponsor because otherwise you might be you know getting yourself into trouble and if you're in this group think you know environment and everybody's saying oh this this sponsor is great well you're going to think that too and you're going to invest and it might not be a good sponsor so just be careful with these groups where you've got a lot of unsophisticated people either running them or you know members or you know Founders that are trying to profit off of their members in a way or connected somehow to a sponsor I would stay away from any group or investment where you know there's there's someone connected to somebody and getting paid for that so that that you know just has obvious uh incentives that that don't align with your interest there this last one is the best advice you will ever get as far as when you're looking to invest in investment funds it will help you avoid the M rookie mistake I made it will help you avoid the same rookie mistake a lot of my friends have made just don't invest with people who have a podcast a YouTube channel and this is coming from someone who has their own YouTube channel don't invest with people who are podcasters or YouTubers they do not have the right Focus they are trying to I'm not trying to be an influencer I'm trying to be a thought leader in this space but if you're out there you know running an investment fund is your day job but you're spending more time on your YouTube channel or podcast you know you're you don't have the right focus and again it's just not really how that industry works good quality sponsors they might be guest on you know a show or something every now and then which is great and fine but they're not running their own podcast I just think that you know in my experience I've only seen people get in trouble by investing that way there'll be a podcast you know where the podcast host is the fund manager one of the fund managers or the podcast host is you know affiliated with the fund be careful you might not always know that that they're a principal and they're part of the general partner even though they're not like the CEO or you know the big person at the fund so watch out for that there there could be some affiliation that you're not even aware of so lot of sleaziness in the space watch out for it you know I open being able to invest in understanding and access to Quality sponsors was such a GameChanger for me I would say it's probably one of the top five reasons I've been able to Achieve Financial Freedom early in life I cannot speak enough about how lucky I am to have access to really amazing quality sponsors I've just I I find it a privilege to be able to invest with them I trust them they've done you know great job for me as far as Returns on my money so I feel very thankful and again check out my course as far as my process if you want to understand that more in detail I'm not going to tell you what to invest in but if you're a credit investor it's a great understanding for you to get a good pipeline for good future deal flow so hopefully you found this video helpful if you did please like the video and subscribe to the channel