Hi gang-

I've identified a mixed use property that I'm interested in acquiring.  I like to use other peoples money for purchasing properties, as I have a few I've done that with already and had great results.  However, my current network of friends and family is currently not liquid enough for this deal.  

The property is 10 units mixed use, and I think I can acquire it for around $585k as I know the owners. My bank will give me better rates than what I've listed, but I've been a little more conservative on my numbers in anticipation of rising interest rates. I've attached a spreadsheet that I designed for running calcs.

Couple of notes on my numbers:

-I have a guy that works part time for me that helps manage the properties I have, so thats why the rate is lower.

-The 2nd mortgage is note to the investor(s) that would be on a 10 year note for the DP

-I can handle the financial risk the bank wants by securing against one of my current properties

-I'm not too crazy about these ROI's. They are good, but lower than my historical average.

-The property is not a value add. Purely a buy and hold at a fairly low price. It does have the advantage of being in a kick-*** location that will potentially have large value in 5-10 years.

-My exit strategy is to pass to my children one day.  Once the note to the investor is paid off, it becomes a great cash-flow property.

-Current cash flows will be held in an account as a security for the investor if there is a large vacancy period.  This is for a very, very passive investor

Thats the deal.  Heres my questions:


  • I need to reach outside of my network for investors, people I don't know that well.  Are there any SEC considerations I need to understand? I've tried researching and it is a bit confusing. 
  • I have not attempted to put the property under contract yet.  I don't think that finding an investor will be too difficult.  There is no Chicken or the Egg problem for me.  I fully plan to put the property under contract and simultaneously look for an investor.  Is this a bad approach?
  • Do my numbers make sense?  The property is currently a solid Class B.  I have toured it twice.