Over Raising Your Fund to Provide a Return to LPs…

Let’s say you need a million dollars in your fund. Well, you could raise 1.1 million and use that additional $100,000 to pay them some kind of a holding interest rate while you find the properties. This is something that syndicators like because it’s a very easy thing to do. You over-raise and then you use that money to pay investors whatever their holding costs in, but many investors don’t really like that. You’re basically paying them interest with money they’ve already given you, so it’s sort of a return of capital. But it’s definitely an option for you, and I do know some people that do take that route.

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