Real Estate Blind Fund Solution to Biggest Investor Concern
Take a small percentage up front, sort of like a deposit. So, start your fund, investors sign, all the disclosure documents, the PPM, the operating agreement, subscription agreement, but instead of giving you their entire, let’s say it’s $100,000 investment, instead of giving you the entire $100,000, they just give you a percentage. And when you’re ready to receive the rest of the monies, then you can do a cash call for the remaining 90%. If they fail to give you that cash call, then they forfeit that 10%. It’s less likely for them to find a different investment because they’re losing 10% if they were to renege on their commitments.
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