2nd. Syndication deal in the books
We closed on our 2nd syndication deal on the 21st. It is a 48 unit (4 -12 plexes) all brick with pitched roofs built in the 60's so it needs some updating/rehab. It was self managed by the seller and the rents are below market and after we do the rehab over the next 12-18 months we'll be up to market rents with improved cash flow. We were able to purchase it for $1,685,000 and the first yr. NOI should be $135,000. After we're up to market rents NOI should be $161,000 - a gain in value up to $2,000,000 at an 8 cap. We raised $450,000 from investors and my syndication entity gets 50K in "sweat equity" and I invested 50K along with the investors. I find that they feel better about investing if they know I also have skin in the game. If operations go as I project we should have a first yr. cash on cash return of 8% and after we're at market rents should be up to 11% cash on cash. The plan is for a long term hold for tax advantaged cash flow. This is my first time actually getting sweat equity in a deal and it is a little exciting to be making a deal like this come to fruition.