Structuring Equity Partnership for Small Portfolio

[Denise Webster]

I’m working with a team that has assembled a small residential portfolio in the Albuquerque, NM suburbs, and would appreciate input from those actively structuring deals with equity partners in today’s market.

The portfolio currently includes:

   2 stabilized SFRs (~$240K value each)

      ~$1,800/month rent

  ~$1,000/month mortgage

      ~$800/month net per property

   1 value-add property

      Purchased at ~$225K

      ~$175K rehab

~$500K ARV

All properties were acquired off-market using Subject-To Agreements.

The team is looking to bring in an equity partner to:

   -- Complete the reposition on the value-add asset

   -- Strengthen reserves across the portfolio

   -- Continue acquiring similar opportunities

Rather than structuring this as a single deal, the goal is to position it as a portfolio-level investment with strong returns. 

We’re evaluating a couple of approaches, preferrably either by Preferred equity (10% pref + backend split), or a Hybrid structure (6–8% pref accrued + equity at exit over 3–4 years).

A.  For a portfolio like this (mix of stabilized + value-add), what structures have you seen resonate most with equity partners recently?

B.  How are investors currently pricing risk on Subject-To acquisitions in a portfolio context?

C.  Would you position this as a pooled investment across assets, or keep allocations deal-specific?

Appreciate any insight from those actively placing capital or structuring similar partnerships.