Private equity investments in real estate
Private equity, as the name implies, refers to investment in a private company. And it usually generates better returns than the public capital market. But how does a private equity fund work in real estate?
A real estate private equity fund is a company whose objective is to gather investments for the development of real estate projects. The sponsoring company of the project provides part of the capital called “social”. Generating income that goes according to the performance of the project.
Unlike Real Estate Investment Trusts (REITs), private equity investment in real estate involves a significant amount of available capital. And it will probably only be approved for accredited or long-standing investors.
What are the returns on private equity in the real estate sector?
Normally, private investment capital comes from individuals with high purchasing power or companies that buy participation in private companies. Or also from private companies that take control of public companies to turn them into private ones.
As you move up your real estate private equity hierarchy, the compensation grows similar to traditional private equity. In most companies, bonuses can grow from 100% to 200% in a few years.
With BAI Capital, you can own real estate investments in the USA. Where the minimum annual fixed rate of return is 7% and the objective is to reach up to 15% in selected projects.
Differences between private capital and public capital in the US
Private capital and public capital represent two different sources of financing with diverse characteristics and objectives.
Private capital, coming from individual or institutional investors, is primarily directed at private sector companies with the purpose of obtaining financial returns through ownership and growth of the financed companies.
This type of capital is subject to fewer regulations compared to public capital and is usually associated with higher risk investments but also with significant potential returns.
On the other hand, public capital is derived from government sources, whether at the federal, state or local level, and is allocated to projects of public interest ranging from infrastructure to social programs and basic services.
Unlike private capital, public capital is subject to greater oversight and regulatory control due to its public origin and use of funds from taxes and other government revenues. Furthermore, public capital aims to satisfy collective needs and promote the general well-being of society, in contrast to the profit-focused approach of private capital.
So, while private capital seeks to maximize financial benefits through investments in private companies, public capital is destined for projects of public interest with the purpose of satisfying social needs and promoting the economic development and well-being of the population in general.
Both forms of financing play fundamental roles in the United States economy, each with its own advantages, challenges, and repercussions on the country’s social and economic fabric.
Investing in BAI Capital is investing in the United States
BAI Capital or Become American Investor LLC is a boutique firm with more than 12 years of experience specializing in raising, investing and managing private capital. Mainly for capital investments in real estate development projects in the United States.
With presence in the real estate sector in the states of Florida, Texas and New York. We specialize in generating value from the acquisition of land to the development of large-scale projects. Such as residences for the elderly, student residences, multifamily buildings for rent and mixed use that include condo and retail.
In this way, we guarantee fixed and stable returns for your client portfolio. In addition to having a confidential work protocol with encrypted web forms, use of protected personal data and private meetings with our agents throughout Latin America.
You already know how private equity investments in real estate work. If you are looking to protect your capital from inflation or want to know how to apply for a Green Card to obtain US residency, complete our form in the “contact” section.
