I found a good deal in Tacoma, WA. It will meet the 2% rule. And that’s with a 6million investment. After going through the property with a lender, a contractor, and my Realestate expert. They all think it will take somewhere between 2-3 million to fix and flip. I would like to fix the 60 unit property, hold it, and manage it. I currently house hacked my home in Tacoma, then bought my neighbor’s house and make a 4% profit. I think I can do that with this place. I just need to know how to find the investors seeing how my money is tied up in my two houses. I don’t make a lot of money from working at Boeing and the national guard but I want to get to the next level of Realestate property rentals. I am pretty new to this world I just started out in May of 2017. Id like to close the deal and start on This multi family property as soon as possible, where can I find the money?
Troy, if you are looking for $6-$8mm, it sounds like a syndication would be your best bet.
Troy - I would agree with Percy. That's a lot of money. But be careful and get your spreadsheets going with analyzing all of the numbers. Maybe raise the 20-30% down payment with private and then do the rest with a commercial loan. I heard banks are very reasonable these days if the numbers work. @Michael Blank has some great video tutorials to get you started.
@Troy Chambers , that is quite an undertaking for your first big deal. You would be better served getting the deal under contract at the right price and then shopping it around for another buyer to wholesale it to or partner with. If you go the partner route, don't expect much more than 5% of the deal (5% of that deal could end up being several hundred thousand and a huge experience boost).
If you do it on your own, the syndicate the deal, find a loan sponsor, get a bridge loan and take it down.
and the 2% rule doesn't say much about whether its a good deal or not.
@Troy Chambers I don't know many investors who would invest for a 4% return especially for an intensive value add deal of which you don't really have any experience doing. Investors are going to want to see returns above 8% cash on cash year 1 with the ability to multiply the principal 2-3 times over a decade if it is a long term hold.
So I have done some more research on the property, purchase plus rehab will be $4.3million, and a rental income of $120,000 - $140,000 a month. Now how do I share the research and the deal that I believe I have found without someone (i.e. the investors that i'm taking this deal to raise the 20%) so they don't just take the information and run with it. It could take about one to two years to complete the rehab and then two and a half years to pay all the investors back. So how do i share all the details?
Put the property under contract
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