2nd. Syndication deal in the books

9 Replies

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.

@Dennis Tierney that's quite an accomplishment, congrats!!

What was the time frame from start until closing?

We had 60 days due diligence and closed 30 days after that so 90altogether. The seller wanted less but Iknew it would take longer because it was a syndication and I'm glad I gave myself the extra time because we needed it with all of the different forms and info the bank needed due to 9 people involved in the syndicate.

@Dennis Tierney Isn't it great when it all comes together. Congrats. We just closed on 62 units in Houston. It did take some work.

Congratulations @Dennis Tierney! I closed my second syndication deal in mid December. I know how tough it is and I also know how great it feels to actually get it closed. Good luck with the property and the rehab.

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