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Real Estate Blind Pools

Real Estate Blind Pools

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Published by Douglas Slain
This 50 page monograph is for anyone seeking $500,000 to $5,000,000 to fund a real estate limited partnership without specifying which properties will be purchased. This form of investment is colloquially known as a blind pool.

Just as with a real estate investment trust (REIT) where investors do not know which properties the partnership will purchase, a blind pool limited partnership valuation is based on the partnership's prospects-- which in turn are based on the general partner’s track record.

This is different than a specified asset partnership where an investment can be evaluated based on costs and pro-jected revenues.
Interestingly, there is no evidence that the average performance of blind pools differs significantly from the performance of comparable specified asset partnerships.

For most real estate entrepreneurs the advantages of be-ing able to raise money without having to first identify and have under contract a particular property are obvious. However, when hearing the word “securities” in connection with raising money for their particular deal, most real estate operators react as 14th C. Flemish townsmen might have upon hearing of a new plague.

But securities can be a good thing. Showing sophistica-tion about the securities component of your project can garner respect as well as expand the number of prospec-tive investors, to say nothing of providing asset protec-tion advantages down the road if things go south.




This 50 page monograph is for anyone seeking $500,000 to $5,000,000 to fund a real estate limited partnership without specifying which properties will be purchased. This form of investment is colloquially known as a blind pool.

Just as with a real estate investment trust (REIT) where investors do not know which properties the partnership will purchase, a blind pool limited partnership valuation is based on the partnership's prospects-- which in turn are based on the general partner’s track record.

This is different than a specified asset partnership where an investment can be evaluated based on costs and pro-jected revenues.
Interestingly, there is no evidence that the average performance of blind pools differs significantly from the performance of comparable specified asset partnerships.

For most real estate entrepreneurs the advantages of be-ing able to raise money without having to first identify and have under contract a particular property are obvious. However, when hearing the word “securities” in connection with raising money for their particular deal, most real estate operators react as 14th C. Flemish townsmen might have upon hearing of a new plague.

But securities can be a good thing. Showing sophistica-tion about the securities component of your project can garner respect as well as expand the number of prospec-tive investors, to say nothing of providing asset protec-tion advantages down the road if things go south.




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Categories:Types, Business/Law
Published by: Douglas Slain on Jul 15, 2011
Copyright:Traditional Copyright: All rights reserved
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02/18/2015

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