BiggerPockets

What about you in this deal makes me want to give you 7million.

We need more details on what it is you offering if you want someone to take yous seiously. Also people are gonna want to know what makes you worth 50% especially if you have no skin in the game.

Charles

I still don't think that guaranteeing me a specific return will be enough to give this person that much equity.

If I had the money and wanted to finance that much of the deal I'm sure I could find someone else to do the deal for considerably less amount and probably manage the place too.

On an aside how are the apartments coming along?

Is it just me or is contemplating a multi-million dollar piece of real estate as your first property purchase a little nuts? I mean, seriously, I've been a property owner for almost 2 decades and a landlord for over 10 years and I believe I would be getting in over my head with anything bigger than a 4 or 6-plex right now. Am I wasting my time with condos and SFR's? What am I missing here?

I think it is all in how you feel about it. There are some that have it to try commercial and make it, some don't.

Its one of those comfort level things, do you feel comfortable attempting such a large transaction as your first deal. Just like if you lose your shirt in a SF deal just on a larger scale but if your smart you got non recourse financing and you will be able to pick yourself up easier than if you got a recourse loan for your first SF deal and tanked on it.

That being said the op in this post is doing no different than some do on SF, they come in say you put up 100% credit I'll supervise the rehad I'll take 50%

Same here just different level of play. Willl this person ever get the funding their looking for, no they won't because they don't know what they are even asking for or what they can give to make it worth it. They should learn a lot more before trying to do what they'are doing but at least they're doing something besides sitting on the bench.

Charles, I suspect the $7 million will be mostly debt so the equity will be less and therefore the OP's 50% will also be less than the $3.5 million you mentioned.

Having said that, I agree with the other posts on here. The OP can perhaps get a finder's fee if the deal is a good one. But the NOI has to be very high in the six-figures (close to 7-figures) to justify a purchase price of $7 million.

I have a completed project summary that I really did not want to post on here. If there is anyone who is interested in really investigating this deal can email me and I can give more information. Forgive me, but I feel I have stumbled into an exclusive club and not the helpful network that I perceived. If this group is only for veteran REI that were born wealthy investors, please forgive the intrusion. Maybe, I will return after twenty years in the business. I thought this was a place where a novice could get help and encouragement, perhaps I was mistaken.

Kimentha, I'm sorry if it appears everybody here is coming down on you kind of hard, but you are mistaken about several things.

BP is a helpful forum where people can ask questions and post advice/opinions. It's also a place for investors to meet and exchange opportunities. But you're not doing that. You're basically coming here and saying, "Hey, somebody give me $7 million and I'll give you half of it back." Where is the opportunity?

Secondly, the only "wealthy investors" I've met here weren't born into it, they worked their freekin' a$$es off! I'm not sure what you learned in the last 2 years, who's been teaching you, or (shudder) what you paid for it, but if they're telling you to pursue multi-million dollar real estate deals before even investing so much as into your own residence or a small rental property, then you need BP more than you think.

Finally, the people here are trying to save you time and get you back on track. If you're going to sit by your computer or telephone waiting for some "angel" investor to drop $7 million in your lap for your FIRST deal, you are going to sit around for those 20 years and never get anything done.

So, if you are somehow successful in purchasing this property, then you need to write a book so the rest of us can learn how it's done. Or maybe you have an "inside" track on this property, e.g., your rich uncle is willing to sell it to you for 25 cents on the dollar in order to keep it in the family. You may find an investor at that point, but who is the "born wealthy investor" then? ;-)

We have a whole syndication group to go over things like this. If anyone is interested in learning more please join in the groups section of BP.

Raising $7M in equity in today's equity-starved environment is VERY HARD. I won't say that it is impossible, but I am working with people with 35+ years of experience that cannot raise anywhere near that amount of money for their projects right now and they have DECADES of track record to point to making GOBS of money for their investors.

If you do succeed in locating someone to place $7M in equity (or X% of $7M if financed) with you in exchange for 50% interest please share their contact information with me. I could use one of those too!

"It depends"

If you are used to raising funds one way and your funding source goes away then it is perfectly reasonable that you will be starting again from square 1 with the market the way it is today.

My guy has made several million (I don't know the exact number), but he has also lived and spent money.

Your suspicion is warranted, but there are plenty of people starving in this environment that have long track records of success. When they are having a hard time raising money I am quite certain new folks will have an order of magnitude harder time raising funds.

I don't think any of us are saying you should "stick to mopping floors" or that you can't make it in the real estate business. Everyone here started somewhere. I would guess that very few real estate investors started with $7 million deals, though. The few that did start with big deals like this had money, contacts and family as a starting point. Learn the business, start with a realistic deal , work hard and I'm sure you can succeed.