"Most people don’t step back from capital raising because of family, they step back because it’s harder than they thought it would be."

Retoro Capital Investments

How to Excel When Things Aren't As Easy as We Hoped

Recently, I’ve seen entrepreneurs announce their decision to “step back” from LinkedIn, citing the need to spend more time with family, or that AI has damaged reach, making time on the platform less valuable. On the surface, this sounds admirable. After all, we’re all here to build businesses that support the lives we want, not take away from them. But if we’re honest, this isn’t the real reason people are pulling back.

The truth is, if LinkedIn were yielding results like it used to, they wouldn’t be stepping back.

Yes, showing up authentically every day takes time away from family, work, and other priorities. But when those efforts bring in leads, sales, and long-term opportunities, the ROI makes it all worthwhile. The issue is that when the DMs dry up, clients or investors are sparse, and deals don’t close, enthusiasm wanes. Optimism turns into frustration. And people step away.

They had families before starting a business; that's not news. They just thought this would be easier than it actually is.

The Hard Truth About Raising Capital

In real estate private capital raising, the path to success is long and arduous. Trust-building is at the core of our business, and that means we’re often operating on a two-year sales cycle. It takes months after meeting an investor before they place capital, then it can sometimes take years before we, as operators, see financial results from distributions from the relationships we nurture today.

Right now, the market is especially tough.

Frankly...it can be ugly out there.

Here are some difficult trends that I’m seeing in funding commercial real estate:

1. Deals Are Smaller

The 200+ unit buildings we saw in 2021, often acquired by less experienced operators chasing “scale,” have dried up. The deals are tighter, and seasoned operators have been taking a more cautious approach all along by not overpaying for assets bid up by inexperienced operators who are now struggling.

2. Raising Capital Has Never Been Harder

It all looks great online with the talk of passive income freedom, entrepreneurship, and optimism still everywhere. But in private, I'm hearing a different story. Even the most successful operators are reporting some of the hardest raises of their careers, with fewer leads, commits, and funding. I've never been great at raising capital even during the bubble, so I haven't personally noticed much difference in my potential investor leads and funding conversions, but everything I'm hearing leads me to conclude that it is indeed ugly out there!

3. Transaction Volumes Are Down

Professionals like brokers, title agencies, and attorneys are seeing a 50%+ drop in transaction volumes. Fewer people are selling unless they are in real trouble, and many are trying to wait out the market.

While cap rates are recovering slightly with reduced interest rates starting to yield better cash flow, transactions are also coming back up. But overall it's a huge net loss from two years ago. The high returns bubble investors became used to are back to normal levels, and that has eroded trust in all but the most experienced private market investors.

4. Capital Markets Are Slow to Recover

We are entering a very inflationary environment which will continue to keep capital flows tight as the inflation settles in like that unpleasant in-law we have to invite to every holiday dinner.

Furthermore, demographic shifts such as the smaller generation of Gen X investors in our 50's fueling private markets, fewer Gen Z consumers, a shrinking investor base as Boomers retire, or Millennials competing for less jobs to AI efficiencies, feeds inflation by driving wages up, while reducing overall demand. These pressures persist as the liquidity from pandemic-era stimulus spending has evaporated, leaving inflation in its wake. On top of that, supply chain vulnerabilities and geopolitical instabilities are incentivizing industries to reshore operations, while the high short-term costs of retooling energy infrastructure further exacerbate price pressures. Falling interest rates intended to stimulate borrowing and loosen capital markets, is a delicate balance that will sustain inflation and tighten private capital.

While advances in AI and automation can increase productivity and lower labor costs, these shifts will take years to fully stabilize. For now, we’re in the middle of a turbulent transition, facing prolonged uncertainty that will continue to challenge private investor confidence.

The result is that many capital raisers are stepping back, not only because of family priorities as claimed, but because business is just tough right now. Instead of doubling down to stand out among ever thinning competition, they’re retreating to more stable sources of income from jobs or other businesses, leaving this capital raising business behind as we do a well-intentioned but difficult new year's resolution. There's guilt in that abandonment like we have when looking at all the equipment we bought for our latest hobby and then never use, but eventually we just sell it at a loss and move on.

Why We're Doubling Down

Despite some of the setbacks, there's a lot to be excited about in real estate investing. That's why we are still able to be retired early on passive income and still growing our wealth in any type of market conditions. Not having other careers compete with time running our business is key: we already have built passive income and retired from corporate, one less pull on our limited time.

I've mentioned before that raising capital has always been a challenge for me, so it doesn't feel much different than it always has: I'm not a great salesperson. Each dollar represents a long-term relationship, and that doesn’t change whether the market is booming or struggling. Our business isn’t flashy. We have a long-term mind set for our capital raising business to bless other families' lives as ours have been, so in a business that hasn’t paid owner distributions yet, we must have other sources of the very passive income that we preach about. Every dollar we earn passively allows us to take steps forward in the business that are intentional, sustainable, and focused on delayed gratification creating a strong foundation. We are building our capital raising business the same way we built our passive income portfolio: on a foundation of integrity and patience.

LinkedIn is a critical part of that strategy. Showing up consistently builds trust, credibility, and visibility for the business. Our business model is not about closing deals with new investors today, that's not how this works. It’s about weathering lean times without needing the business income, laying the groundwork today for opportunities tomorrow.

Marketing is also a way to increase trust with existing investors who see that we are doing what we promised: finding and managing deals for all of us collectively who invest together.

A diversified portfolio of non-correlated assets such as real and paper, passive and active income, debt/bonds and equity investments help to cover bases and weather economic shifts.

Balancing Business and Family

Keeping family a priority while working a job and running a capital raising business on the side can be tough even in times when investor capital is flowing freely. When it's a struggle to complete a raise, it's hard to justify the time when the business is struggling. It's easy to see why some are stepping back, but it doesn't have to be that way.

We take an integrative view of family and business so they do not compete or detract from one another. It's also one of the reasons we homeschool, so it’s not about choosing between family and work but creating a life where they enhance each other. You can use these suggestions in your own work/life balance of using time together intentionally:

1. We double-dip activities like playing, taking our kids to work with us, exercising, talking, cooking, worshipping, and laughing together. And singing: I have five daughters, there's a LOT of singing (while my one son graciously puts up with it!)

2. We prioritize downtime alongside structured time. Our daily routine interaction of living and working together adds up in quantity time than enhances our quality time in more scheduled or formal family events and outings like attending their activities.

3. Since leaving corporate, my kids have come to really appreciate spending time with their dad on random weekday afternoons, compared to him working 9-5 before we retired on passive income to start a passion business helping other families enjoy this slower lifestyle through passive investing.

Our business doesn’t compete with our family; it supports it. And LinkedIn doesn’t detract from that balance, it’s part of building a future where we have even more freedom, financially and with our time, to enjoy the things that matter most ❤️

Why You Should Stay the Course With Us

It would be easy for us to only talk about the positives, and we spend a lot of time doing that. Our team is full-time investors living on passive income right now, enjoying early retirement right now.

We also recognize that there are fewer investors, less liquidity, and less confidence due to troubling economic news or underperforming deals that are unsettling investors. The time to be decisive and benefit from great opportunities is during uncertainty, and that is where we help!

If you’re feeling uncertain about investing in today’s environment, that's totally normal. That means it's time to diversify by investing alongside public markets like stocks, mutual funds, and bonds in private deals with patient operators who are riding through this period of uncertainty with grace and long-term thinking.

It may also be important to address any mindset issues that may be holding us back, such as remembering that challenging markets create opportunities for those who remain steady. Times like these thin out the competition, revealing the disciplined, thoughtful entrepreneurs who position themselves and their investors for long-term success.

At Retoro Capital, we’re committed to building a business with integrity, sustainability, and purpose. Our focus is on creating steady, reliable returns while preserving the values we share with our investors that matter most, such as spending more time with loved ones through financial security, and leaving a legacy by giving back. Together, we can navigate this uncertain market and emerge stronger, with a foundation that supports your life today and for generations to come.

Let’s discuss how to stay steady in a volatile market with reliable 10 or 12% APR on cash-flowing private real estate loans to our network of trusted borrowers. It's how we create stability in our own portfolios, and what we share with our investors.

Find us in a free phone call at partnerwithrci.com