As Joel Grey and Liza Minnelli sang in Cabaret, “Money makes the world go ’round”! And, as we all found out in 2008, when the money stops moving, everything stops.
So for the last three years, we’ve paid extra attention to the macro-economic factors which affect the availability and cost of capital. It’s become apparent that conventional money remains constipated because, in spite of ridiculously low interest rates, capital is not yet flowing. Banks remain extremely cautious. And when they can borrow from the Fed for next to nothing, they don’t really have a sense of urgency to make loans.
However, the need of the marketplace for money to operate remains strong. Couple this with the need for investors to get yields on idle capital, and there’s an obvious opportunity. We’ve dedicated several shows to taking a closer look at opportunities in private capital. This episode continues that theme as The Real Estate Guys™ head to New York to get perspectives and coaching on organizing private money as a way to cash in on the many bargains available in today’s real estate and note markets.
Behind the mobile microphones on location in the great Northeast:
- Your host and radio Cabaret operator, Robert Helms
- Co-host and aspiring, but awful, Cabaret dancer, Russell Gray
- Special guest, attorney and mayor, Jon Hornik
Before a private capital fund solicits deals and moves money, the organizers meet with an attorney to set the whole thing up. So, although anecdotal, if such an attorney experiences an increase in requests to set up these funds, it’ an indicator of capital formation. And when capital forms, it’s for the purpose of moving. We always want to be in the flow of money, so we’re very interested in Jon’s comments about what he’s observing – since he’s on the front end of the private capital formation cycle.
Of course, we aren’t merely spectators, so when there’s opportunity in the marketplace, we want to get in on the action. So we also make sure to pick Jon’s large and experienced brain for tips on how to set up and operate a successful fund.
So whether you’re a market watcher wanting to get a feel for the flow of capital, or you’re an aspiring fund former, listen in on our informative interview with attorney Jon Hornik.
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The Real Estate Guys™ Radio Show provides real estate investing news, education, training and resources to helps real estate investors succeed.