1st Apartment Purchase Questions - 24 unit
Hello BP community!
I am looking at a 24 unit apartment building currently. All of the numbers work, and I am ready to move forward. I don't have the funds for the down payment and I am talking with a few investors currently about investing with me. It is listed for approx. $650k. I am looking to raise about 80-90% of the down payment from investors, and I will be putting down the rest.
My questions today are:
1. How do I structure my company to split this investment with the other investor(s)? I will form an LLC for the property. How do I split the share in the property? Lets say for the sake of this discussion we will be splitting 50/50, because I will be doing all of the work on the property. Should there just be an operating agreement that splits the profits for this company? I am looking into additional properties as well. Would I then have a holding company that has all of my potential properties including this one under it? I want to have my company structured correctly from the get go.
2. What is the process for purchasing an apartment complex? From what I know it should go like this: (Let me know if there are any other tips/details I should know of)
-Negotiate offer
-Send written agreed upon offer with due diligence and financing contingencies (typically 60 days)
-During due diligence get further info from seller (i.e. financial statements. I already have the past two year 8825 forms)
-Get building inspected
-Finalize financing
-Revisit the price if necessary based on inspection and new information found.
-Close on deal.
Sorry for the long post! Thanks Guys!