How Family Offices Source and Structure $1M+ Deals

Family offices represent some of the world’s most sophisticated and resourceful investors, tasked with preserving and growing wealth across generations. Sourcing and executing deals worth $1 million and above can be a complex dance requiring creativity, foresight, and collaboration. In a recent discussion featuring prominent family office leaders and investors, we gained valuable insights into their approaches to deal sourcing, structuring, and achieving long-term success in a challenging economic environment.

This article distills key lessons from these industry experts, offering actionable strategies and unique perspectives on navigating opportunities in real estate, private equity, alternative investments, and beyond.

The Evolution of Family Office Investments

Family offices often serve as stewards of multi-generational wealth, pushing them to think beyond traditional investment strategies. While the foundational pillars like real estate and equities continue to dominate portfolios, the panelists revealed growing interest in alternative assets such as private credit, sports funds, commodities, and emerging technologies like AI.

Key Drivers Behind Investment Decisions

1. Economic Environment and Adaptability:
   The shifting economy and rising interest rates have prompted family offices to focus on more liquid investments. Short-term horizons (1–3 years) have replaced long-term commitments, such as 7–10-year closed-end funds, for many. This shift emphasizes adaptability in portfolio management.
2. Creative Deal Structuring:
   One standout example came from JD, who shared how his family office transformed a 64-unit property on Hilton Head Island. Instead of selling traditionally as a multifamily property, the team subdivided it into individual parcels and sold them as timeshares. This move increased the sale price from $6 million to $14 million, demonstrating the power of innovative thinking to unlock hidden value.
3. Direct and Co-Investment Preferences:
   Many family offices are moving away from traditional fund models and opting for direct investments or co-investments. This approach allows them to eliminate high fees, maintain greater control, and tailor investments to their specific objectives.
4. Focus on Underserved Markets:
   A critical theme among the panel was identifying opportunities in areas of significant unmet demand. Affordable housing, senior care, and food security emerged as high-growth sectors where thoughtful investment can deliver both financial and social returns.

Strategies for Spotting Hidden Opportunities

What sets high-performing family offices apart is their ability to see potential where others see problems. Here are some of the strategies shared during the discussion:

1. Challenge Conventional Thinking

JD’s example of reimagining a multifamily property as timeshares underscores the importance of looking at deals through alternative lenses. Another instance involved converting properties into fourplexes to cater to buyers using minimal down payments. These anecdotes highlight how creative solutions can yield outsized returns.

2. Build Strong Relationships

Many opportunities come not through brokers but through personal relationships with banks, other family offices, and trusted advisors. Establishing these connections requires a mindset of collaboration rather than pure transactions. For example, one panelist emphasized the importance of meeting people at events, learning about them as individuals, and making genuine human connections.

3. Analyze the Entire Capital Stack

One family office leader shared their approach to engineering the right debt and equity components for deals. From HUD financing to strategic co-investments, leveraging innovative tools within the capital stack can create more efficient and profitable structures.

4. Invest in Undervalued Sectors

Several panelists highlighted the massive opportunities in sectors like affordable housing and senior care. For example:

• America is currently short 4.8 million homes, creating a significant housing gap.
• The U.S. faces a shortage of 800,000 memory care beds, creating demand for senior living facilities.
• Food security and critical minerals are emerging investment themes, with family offices building industrial capacity to address these needs.

Lessons Learned: Insights from $1M+ Deals

Throughout the discussion, panelists shared their most valuable lessons learned from years of experience in high-stakes dealmaking. Here are the highlights:

1. Diligence is Everything

One investor stressed, "Do your diligence upfront because once you're in the investment, it’s too late." This applies not just to analyzing the numbers but also to vetting the people and teams behind deals. Strong underwriting and thorough comparisons of funds or managers are critical steps to mitigate risk.

2. Persistence Pays Off

Success in dealmaking often comes down to showing up every day and competing at the highest level. One panelist remarked, "Persistence is better than a Harvard MBA." This underscores the importance of grit, consistency, and a relentless commitment to learning.

3. Fail Forward

JD encouraged embracing failure as a learning opportunity: "Fail now and fail often. The most expensive real estate in the world is the graveyard, because it’s full of ideas that never came to life." For family offices and aspiring dealmakers, experimenting and taking calculated risks are essential for uncovering new opportunities.

4. Prioritize Relationships Over Transactions

A recurring theme was the value of relationships. Deals rooted in trust and transparency tend to outperform purely transactional ones. One panelist noted, "If someone wants a transaction, I’m not your guy. It’s about relationships and working together."

Key Takeaways

• Embrace Creativity: Look beyond traditional deal structures to unlock hidden value, as seen in the Hilton Head and Cincinnati examples.
• Adapt to Market Conditions: Focus on sectors with significant unmet demand, such as affordable housing, senior care, and food security.
• Leverage Relationships: Build strong connections with banks, other family offices, and advisors to access off-market opportunities.
• Invest in Diligence: Rigorous analysis of both the investment and the people behind it is crucial to mitigating risk.
• Be Persistent: A strong work ethic and a willingness to learn can be more impactful than formal credentials.
• Fail Forward: Treat failure as a stepping stone to success and encourage innovation within your team.
• Think Long-Term: Certain opportunities, like those in critical minerals or industrial farming, benefit from a 30–50 year horizon.

Conclusion

Family offices play a critical role in shaping the investment landscape, and their approaches to sourcing $1M+ deals reveal a balance between creativity, diligence, and long-term vision. By focusing on underserved markets, leveraging relationships, and prioritizing innovative thinking, family offices can continue to thrive even in uncertain economic times. For professionals in private equity, M&A, and wealth management, the lessons shared in this discussion provide actionable insights that can help refine strategies and drive success.

Source: "$1 Billion Allocators: Insights Directly from Family Offices and Investment Firms" - Centimillionaire Strategies, YouTube, Aug 20, 2025 - https://www.youtube.com/watch?v=jsQ23704ySA

Use: Embedded for reference. Brief quotes used for commentary/review.

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