Advice on RE Crowdfunding Multifamily Projects

5 Replies

Hey Guys,

New here. I am doing some research into Crowdfunding a Multifamily 3-5yr buy and hold project here in the Orange County/LA area. I need to come up with some proforma numbers to examine the viability of both equity and debt. Can someone help me with rates and transaction cost assumptions? I am having some difficulty finding current and accurate examples. Any pointers or suggestions would be much appreciated.

Regards,

Brien

Great discussion Brien, I am also interested in learning more about crowdfunding.  I am interested in learning how to raise money for a specific project.

Originally posted by @Brien Dix :

Hey Guys,

New here. I am doing some research into Crowdfunding a Multifamily 3-5yr buy and hold project here in the Orange County/LA area. I need to come up with some proforma numbers to examine the viability of both equity and debt. Can someone help me with rates and transaction cost assumptions? I am having some difficulty finding current and accurate examples. Any pointers or suggestions would be much appreciated.

Regards,

Brien

 Debt- Typically 8%-10% coupon. I wouldn't expect to see very competitive offerings for a near stabilized multifamily of that term length through crowdfunding.  You're better off getting a more conventional loan.

Equity- Preferred return of at least 8% with a 75% split to the investors.  You can probably get a better split but you'll have to pay a little better preferred return.

Fees are generally 2-3% upfront

@Brien Dix looks like @Jim Groves already gave some good info. Only thing I'd add to that is on the equity side I always build in performance hurdles on my multifamily deals with investors. That way we have an alignment of interests and I am compensated accordingly. 

For example, the last 250 unit I did it was: 

- 8% preferred return then split 70/30 (investor/my group). After a 20% IRR is achieved then we do a 50/50 split.