Investing with partners

[Ceasar Rosas]

Hi BP family,

I have a question of structuring a partnership. I would like to know if anyone has put this kind of deal together.

Ex. 

- 5+ Unit that cash flows. 

- But instead of bringing the money to the table you have investors put out the down-payment, ex. 30% of Purchase Price + Closing costs.

- As the person putting everything together you take a percentage of the equity and charge a mgmt and acquisitions fee. 

My question is how do you structure something of that nature?

And do banks allow you to let others put up the money and you sign off for financing? (I do have good credit and a pretty decent income) 

Any advice would be appreciated.

[Jeff Greenberg]

@Ceasar Rosas this is a typical Syndication structure.  If you are in control of the profitability of the project and their funds, this is a security.  There are many threads on the process and I would look any comments by Jillian Sidoti.  

This is very typical, but you need to check with the lender.  I have had lenders turn me down because the 30% owner had 100% control.  Others see this as a typical deal.

There are many ways the sponsor can take their cut of the deal, and you have named the typical ones.

The difficulty is making it work with a very small deal.  I did it with a 20 unit and it was tight getting the needed numbers.  That is when you decide it is time to go bigger.