• The Allocator: A New Way to Finance Real Estate

  • By: Dr. Adam Gower
  • Podcast

The Allocator: A New Way to Finance Real Estate

By: Dr. Adam Gower
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  • Summary

  • Discover the world of the real estate capital allocator, a new way to finance real estate that has emerged only in the last few years. A "capital allocator" typically negotiates preferential terms with professional real estate sponsors on a deal-by-deal basis and then solicits individual investors. They either share the delta between the sponsor's original terms and the improved terms with investors or retain the delta as their compensation. In this YouTube/Podcast series, I interview allocators, investors, sponsors, and service providers to offer you an in-depth look at this growing industry. PLUS, subscribe to my free newsletter for real estate investors and gain access to: * Introductions to sponsors, allocators, and investment opportunities. * Insights drawn from my 30+ years of experience in real estate investing. * Hacks and tactics for raising capital to help you scale your real estate portfolio. Visit GowerCrowd.com/subscribe Email: adam@gowercrowd.com Call: 213-761-1000
    Unless otherwise indicated, all images, content, designs, and recordings © 2025 GowerCrowd. All rights reserved.
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Economics Personal Finance
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Episodes
  • When Capital Raisers Get It Right

    When Capital Raisers Get It Right
    Mar 11 2025
    Capital Raising and Deal Structure Amanda Larson, founder of AMA X Equity, has raised roughly $2 million in investor capital since going full-time as a real estate capital allocator a little over a year ago. She specializes in multifamily syndications, sourcing deals, conducting due diligence, and structuring investments. In one of her largest transactions, the $31M acquisition of The Darby at Steeplechase, she played a key role in securing the deal, structuring the business plan, and signing on the loan. The total equity raise was just under $20M, with multiple sponsors contributing capital. Role in Deal Execution Amanda’s process starts with sourcing deals through broker relationships, conducting due diligence, underwriting, and assembling a sponsor team. In the case of The Darby, she worked with Disrupt Equity, a Houston-based sponsor group, to close the acquisition. Although Disrupt Equity led the project, Amanda was part of the GP team, securing a share of the 20% GP split rather than participating in a fund-of-funds model where capital allocators typically take a cut of investor returns. Underwriting Rigor and Risk Management A key differentiator in Amanda’s approach is her engineering mindset, which she applies to underwriting. Unlike some capital allocators who simply rebrand and distribute sponsor pitch decks, she conducts independent underwriting and due diligence, verifying financial assumptions before bringing investors into a deal. She has learned to be particularly cautious about floating-rate debt, having seen firsthand how misplaced confidence in interest rate stability led to market turbulence. Raising Capital and Investor Relations Amanda primarily sources investors through LinkedIn and business networking events, leveraging her background in the oil and gas industry to connect with engineers and professionals seeking diversification. While she initially focused on operations and underwriting, she has recognized the importance of marketing and investor education, adapting her LinkedIn content to be more personal and engaging. Lessons Learned and Market Outlook Her biggest lesson? Don’t blindly trust the smartest person in the room. She observed many seasoned operators confidently taking on floating-rate debt, despite clear risks, because the consensus among experienced sponsors was that rates would stay low. Additionally, she remains skeptical about the fund-of-funds model, noting that while it provides flexibility, it may be flooding the market with underqualified capital allocators who lack real estate expertise. *** Explore the world of real estate capital allocators—a fresh approach to financing that’s reshaping the industry. In this series, I talk with allocators, investors, sponsors, and service providers to give you an inside look at this fast-growing space. PLUS, subscribe to my free newsletter for real estate investors and gain access to: * Introductions to sponsors, allocators, and investment opportunities. * Insights drawn from my 30+ years of experience in real estate investing. * Hacks and tactics for raising capital to help you scale your real estate portfolio. Visit GowerCrowd.com/subscribe
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    45 mins
  • $20 Million Raised on LinkedIn!

    $20 Million Raised on LinkedIn!
    Mar 4 2025
    Capital Raised and Deal Structure Dr. Raj Venkatramani, a pediatric oncologist turned real estate capital allocator, has raised approximately $20 million from investors, 95% of whom are doctors, since launching REIDOC Capital in 2021. His typical deal size ranges from $10 million to $30 million, and on average he raises $2 million per deal. His primary focus is on multifamily properties of at least 100 units, targeting Class A and B assets and new construction projects, rather than Class C properties, following hard-earned lessons from the market peak in 2021. Leveraging Group Capital for Better Returns Dr. Raj secures better economics for his investors by leveraging group capital. While a typical syndication might offer a 15% IRR with a 6-7% preferred return, Raj pools investors together to negotiate, for example, an 80/20 split (instead of 70/30) and an 8% preferred return, effectively increasing investor returns without requiring larger individual commitments. Underwriting and Market Lessons His underwriting philosophy is focused on analyzing sponsor assumptions, particularly around rent growth projections, occupancy expectations, expense growth, and debt structure. He talks about how bad assumptions can make a weak deal look good, citing an early investment in a Class C Florida asset where insurance costs doubled (from $196K to $400K in one year) and variable rate debt wiped out NOI. Transition to Ground-Up Development Raj expanded the kinds of deal he invests in from value-add to ground-up development and now partners on new construction projects in Sioux Falls, South Dakota, a market he believes is undervalued. His due diligence process before partnering with a sponsor involves a multi-year vetting process, meeting them at conferences, reviewing past deals, and even visiting completed projects before committing capital. LinkedIn as a Primary Investor Source Perhaps most surprising is how he sources capital: 90% of his investors have never met him in person, and nearly all were acquired through LinkedIn and referrals. His LinkedIn strategy? Post consistently for two years, even when people don’t engage, until they reach out ready to invest. Key Takeaway: Trust but Verify His biggest lesson? Trust but verify—real estate is not medicine, where all parties have the same goal. Misalignment of incentives is real, and capital allocators must be rigorous in due diligence to avoid costly mistakes. *** Explore the world of real estate capital allocators—a fresh approach to financing that’s reshaping the industry. In this series, I talk with allocators, investors, sponsors, and service providers to give you an inside look at this fast-growing space. PLUS, subscribe to my free newsletter for real estate investors and gain access to: * Introductions to sponsors, allocators, and investment opportunities. * Insights drawn from my 30+ years of experience in real estate investing. * Hacks and tactics for raising capital to help you scale your real estate portfolio. Visit GowerCrowd.com/subscribe
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    43 mins
  • From Aerospace to Real Estate: An Allocator's Tale

    From Aerospace to Real Estate: An Allocator's Tale
    Feb 25 2025
    The growing complexity of US real estate investment has led to the emergence of a new class of capital allocators, yet many struggle to differentiate themselves in an increasingly crowded marketplace, as a candid conversation in my latest podcast reveals. Philippe Schulligen, co-founder of Boost Capital Group, which has raised $2m since 2022, exemplifies both the opportunities and challenges facing new entrants in the space. A former aerospace engineer, Philippe’s firm positions itself as an intermediary between sophisticated property operators and retail investors, offering what he terms ‘wholesale access to institutional-quality deals.’ Business Model and Deal Structure The business model is straightforward: Boost aggregates smaller investment checks into larger commitments, negotiating preferential terms with sponsors. A typical arrangement might see the sponsor offering a 90-10 profit split versus the standard 80-20, with Boost taking a portion of the enhanced returns while still delivering better terms to its investors than they could access directly. Structural Challenges Yet the conversation revealed deeper structural challenges facing the sector. Despite Philippe’s technical background in risk management and complex systems, potentially valuable skills in real estate investment, his firm's marketing emphasizes generic wealth-building messaging that has become ubiquitous in the space. Investment Criteria The firm maintains strict sponsor requirements: Minimum seven-year operational track record Portfolio of at least 2,000 units Three full-cycle deals completed Vertical integration preferred Philippe says that these standards, developed during the post-2018 property boom, may need reassessment given current market conditions. Capital Formation Hurdles "It's hard to raise money," Philippe acknowledged, highlighting the persistent challenge of attracting investment despite examining some 60 potential deals in 2024, of which only four were deemed suitable for investors. Industry-Wide Implications The discussion highlighted a broader industry challenge: as real estate investment becomes more accessible to retail investors, capital allocators must work harder to distinguish themselves. Many default to similar marketing language about passive income and wealth building, overlooking their unique value propositions. This democratization of real estate investment, while opening new opportunities for retail investors, also raises questions about how effectively these newer intermediaries can compete with established players in an increasingly sophisticated market. The conversation suggests that success in this evolving landscape may depend less on standard industry practices and more on allocators' ability to leverage their distinctive expertise and backgrounds—a lesson that could prove particularly relevant as the sector navigates current market uncertainties. *** Explore the world of real estate capital allocators—a fresh approach to financing that’s reshaping the industry. In this series, I talk with allocators, investors, sponsors, and service providers to give you an inside look at this fast-growing space. PLUS, subscribe to my free newsletter for real estate investors and gain access to: * Introductions to sponsors, allocators, and investment opportunities. * Insights drawn from my 30+ years of experience in real estate investing. * Hacks and tactics for raising capital to help you scale your real estate portfolio. Visit GowerCrowd.com/subscribe
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    43 mins

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