Thread by @Levijameshere

I’m 40 years old and in 2020 after building several startups (some successful exits and one epic failure in the GFC), I decided to dedicate the next 10 years of my life towards building Harbor Capital. Here is how it is going so far. 🧵👇

Harbor Capital is a RE PE firm that invests only in Class B Industrial properties in Texas. We buy warehouses and manufacturing facilities in the $1-5M price range. Our big hairy audacious goal is to hit $1B in AUM by 2030.

My goal is to build not just a great portfolio, but also to nurture a capable and highly skilled team who can continue to grow our AUM after I step out of the day-to-day operations in 2030.

We are pacing to acquire 7-10 deals per year and are highly focused on our class B industrial niche. We have no plans to step outside of Texas’ four major cities but will eventually need to start buying larger assets to hit our target.

We raise capital deal by deal and have no plans to start a fund. I find that the discipline of having to make the case to investors for each property that we purchase is good practice and keeps the team sharp and focused.

Most of the deals that we buy are off market and found from our network of brokers and through getting to know our tenants and the neighbors in the areas where we own.

Recently we have found it works well for us to reach out to tenants whose leases are expiring soon and find out their building needs, then buy a suitable space for them to rent from us. Vacant buildings are much cheaper in our type of real estate.

We are closing our 5th deal right now, have 2 more in early due diligence, and offers out on 3 other properties that look promising. Our total AUM will be $14M once we close this next deal and $21M if we move ahead on the other two that we are working through due diligence on.

We are big believers in tech solutions and leveraging consultants to keep our team small and light. We made the mistake of trying a lesser-known investor management platform that has been a bit buggy and are now in the process of making the switch to Juniper Square.

We do our own property management and will continue to do so for the long run as we find it is useful for us to stay close to the deals that we own. Bonus: many of our new deals are found through the relationships that we build with our tenants.

Our team consists of me and one other team member who are full time, and three others who are part time. We are planning to add two more full time people to the operations team before the end of the year.

My 20+ years of startup history have earned a robust list of investors who I have fostered a long and profitable relationship with. Many are both investors and advisors who assist with strategy and provide much needed advice for Harbor Capital.

In addition to our existing investor network, we’ve found Real Estate Twitter has been an abundant source of new accredited LPs. We’ve met some incredible people on here and are a better company for the advice and additional equity they’ve brought to the table.

Our average LP investment is $100,000+/- and we are strategically focused on continuing to grow a strong network of private investors who will build long term relationships with us rather than to just focus on a few high-net-worth investors or PE funds.

Harbor's overhead is paid for through a fee and promote structure. We charge 2.7% of total equity raised as an annual asset management/ ops fee and a one time 2% acquisition fee, plus 30% of upside as promote. This year we will achieve full overhead coverage through fees.

I personally co-invest 5-10% of equity needed from my own capital in every deal that we do and will continue to do so long term.

We win as a company when we: 1. Source great properties at prices that deliver strong returns. 2. Operate with integrity and excellence. 3. Communicate honestly, openly, and often with our investors. 4. Build a great culture that attracts and fosters stellar talent.

Our model is buy and hold. We deliver value to our LPs through monthly profit distributions, tax advantages and refinances as often as we can.