How to Fund 60 unit apartment acquisition with Zero funds

[Adam Gregory]

I'm analyzing a 60 unit building in Tampa and the financials look solid. 42% expenses, 8% cap rate, 14% cash on cash. 

Problem is I need a money partner but feel like anyone with $400k+ to put into this deal has the ability to push me out of the picture and do it themselves. How do I handle bringing in possible partners without loosing the deal

[Brian Burke]

The age-old chicken and egg scenario. Which comes first, the deal or the money?

The answer is simple. Just as you wouldn’t go to the store to shop without bringing your wallet, you don’t go shopping for real estate without money.

This doesn’t mean it has to be your money, certainly it can be the much-coveted concept of OPM.  But getting OPM means that the investor is bringing money and the operator is bringing something. That “something” has to add value to the mixture or the investor doesn’t need you.

If you don’t want the investor to “steal the deal” you want the investor to need you as much as you need them.  Just finding the deal isn’t enough. You bring the time to run the deal because the investor is too busy. You bring the experience because the investor needs someone they can trust. You bring the track record because the investor wants to know that you’ll succeed at executing the plan. You bring a few bucks so you can make the earnest money deposit and pay for inspections and legal work so the investor doesn’t have to get involved until the deal has been fully vetted.  All of those things add value for the investor and give them a reason to want you involved. 

If you can’t bring those things, you need to go get them, even if it means building your track record one $20,000 house at a time.  If you do have the track record, document it well so that it’s convincing and develop a business plan to show. 

Then go find your money partners, and last, find your deal.  Line that up properly and the last thing on your mind will be that your potential investor will steal your deal.