How to Raise Private Capital for Commercial Real Estate Deals
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 15
- 2 min read
In commercial real estate, access to capital can make or break a deal. While traditional bank loans are common, savvy investors often turn to private capital to fund acquisitions, renovations, and development projects. Whether you're buying an apartment complex, retail strip mall, or industrial warehouse, knowing how to raise private money is essential.
Here’s how to do it—and how to protect your investment once the deal is done.
What Is Private Capital in Real Estate?
Private capital refers to funds raised from individual investors, family offices, or private equity groups rather than banks. These investors may be active partners or passive stakeholders, contributing equity in exchange for returns.
Private capital is often used for:
Down payments
Renovation budgets
Top Strategies to Raise Private Capital
1. Build a Strong Network
Start with your existing contacts—friends, family, colleagues, and local real estate groups. Many investors are looking for passive income opportunities and will consider real estate if the deal is solid.
2. Create a Professional Pitch Deck
Include property details, market analysis, financial projections, and exit strategy. Transparency builds trust.
3. Offer Attractive Returns
Private investors typically expect preferred returns (e.g., 6–10%) plus a share of profits. Structure your deal to reward early backers.
4. Use an LLC or Syndication Structure
For multiple investors, set up an LLC with clear operating agreements. For larger deals, consider syndication under SEC Regulation D.
5. Leverage Online Platforms
Real estate crowdfunding platforms like CrowdStreet or Fundrise allow you to reach accredited investors nationwide.
What Makes a Deal Attractive to Investors?
Undervalued property with upside potential
Strong cash flow projections
Clear exit strategy (sale, refinance, or long-term hold)
Experienced management team
Transparent reporting and communication
Protect Your Investment with Wexford Insurance
Once your deal is funded, protecting the property is critical. Wexford Insurance offers tailored commercial property coverage for investor-backed deals, including Apartments, office buildings, retail centers, warehouses, hotels, and mixed-use buildings
Lessors risk insurance for leased properties
Business interruption coverage
Optional add-ons like flood, cyber, and ordinance coverage
Final Thoughts
Raising private capital opens doors to larger, more profitable commercial real estate deals. With the right strategy and insurance partner, you can scale your portfolio while protecting your assets. Contact Wexford Insurance today to get started.
FAQs
1. Do I need to be accredited to raise private capital?
Not always. Regulation D 506(b) allows for up to 35 non-accredited investors, but legal guidance is essential.
2. What’s the difference between private money and hard money?
Private money comes from individuals; hard money is typically from companies with stricter terms and higher rates.
3. Can Wexford Insurance cover properties with multiple investors?
Yes—Wexford offers comprehensive coverage for syndications, LLCs, and joint ventures.