Would you partner with this investor? I’m nervous.
He is an experienced investor who I’ve wanted to partner with for a while. He seems to be very successful. He is asking for $100,000 Hard cashup front. Looks like return is 8% cash on cash. I need guidance. These are the details:
64 unit complex $2,375,000.00
Total loan amount $1,995,000.00
Down Payment $380,000.00
Upfront repair costs $300,000.00 (all new roofs, curb appeal, and vacant units)
40 2 bedroom @700.00
24 1 bedroom @600.00
Gross annual rental income $508,800.00
10% vacancy $50,000.00
Effective gross income $457,920.00
Expenses:
Insurance $12,000.00
Taxes $11,800.00
Utilities $60,000.00
Dumpsters $9,000.00
Accounting $7,000.00
Maintenance Reserves $38,000.00
Management $40,500.00
Total expenses $178,300.00
NOI $279,620.00
Financing $154,245.76
75 / 25 split Roughly $94,030.68 / $31,343.56
8% cash on cash return for investor
$10,000.00 needed up front and the remaining at closing