Looking for capital partner for 28-units in Columbia, SC

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Looking for capital partner for 28-units in Columbia, SC

Investor · Los Angeles, CA · Member since 2022 · 15 posts · 9 votes

Hi all,

I came across a really good deal in Columbia, SC that is a value-add. Deal level IRR is 31% annualized and average Cash-on-Cash is 16%. It is 1.2million and needs another 250k in CapEx. I can get bank financing at 80% LTV, but would need another 550k in cash for the down-payment, capex, and reserves. All of my cash is tied up in 2 other projects and while I have significant equity in those projects, I can't access due to a variety of reasons.

Does anyone have any suggestions as to how to get the deal done? It could be a capital partner or aspiring syndicator. I am happy to bring on equity partners and open to preferred equity arrangements. I am happy to share my underwriting and a pitch deck with anyone that is serious.

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Chris SeveneyBusiness Member

Moderator

Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

2mo

@Jordan Mendler

have you ever done a deal before or what is your experience?

this is a general comment not directed to you but to people who get statted

10% of something + experience of learning from someone with a lot of experience is worth a lot more than just nothing

i see many will say it's not worth the time or effort when getting started and to me it's shortsighted as they never get started because they want the cake and eat it too.
when I started I researched competition and was giving my partners more than everyone else - it allowed me to have more deal flow which easily made up for the percentage of equity I was giving up but more importantly it gave me a ton of experience that is the most importantly component for anyone in real estate

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2mo
What type of asset is it ? Residential, retail, office etc? If you bring in a partner they will most likely want 80-90% of the equity in the deal.
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- Jordan Mendler
  OP
  Investor · Los Angeles, CA · Member since 2022 · 15 posts · 9 votes
  2mo
  Quote from @Chris Seveney:
  What type of asset is it ? Residential, retail, office etc? If you bring in a partner they will most likely want 80-90% of the equity in the deal.
  @Chris Seveney Do you invest in deals like this? 20% would be reasonable if I am also getting my travel expenses covered. It is more so that without reimbursement of travel expenses the 20% would quickly get eaten up by air tickets, rental cars, hotels, etc. This is assuming I am doing the asset management. If someone else is doing the asset management it is a whole different story in terms of equity.
  0 Reply
Jordan Mendler
OP
Investor · Los Angeles, CA · Member since 2022 · 15 posts · 9 votes
2mo
It's multifamily. 80-90% equity in the deal is a deal breaker. Makes it not worth the time for me to put it together
0 Reply
- Chris SeveneyBusiness Member
  Moderator
  Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
  2mo
  @Jordan Mendler
  
  have you ever done a deal before or what is your experience?
  
  this is a general comment not directed to you but to people who get statted
  
  10% of something + experience of learning from someone with a lot of experience is worth a lot more than just nothing
  
  i see many will say it's not worth the time or effort when getting started and to me it's shortsighted as they never get started because they want the cake and eat it too.
  when I started I researched competition and was giving my partners more than everyone else - it allowed me to have more deal flow which easily made up for the percentage of equity I was giving up but more importantly it gave me a ton of experience that is the most importantly component for anyone in real estate
  7e investments53 Reviews
  Website View Page
  1 Reply
Vijay Friedman
Miami, FL · Member since 2026 · 766 posts · 124 votes
2mo
Quote from @Jordan Mendler:

Hi all,

I came across a really good deal in Columbia, SC that is a value-add. Deal level IRR is 31% annualized and average Cash-on-Cash is 16%. It is 1.2million and needs another 250k in CapEx. I can get bank financing at 80% LTV, but would need another 550k in cash for the down-payment, capex, and reserves. All of my cash is tied up in 2 other projects and while I have significant equity in those projects, I can't access due to a variety of reasons.

Does anyone have any suggestions as to how to get the deal done? It could be a capital partner or aspiring syndicator. I am happy to bring on equity partners and open to preferred equity arrangements. I am happy to share my underwriting and a pitch deck with anyone that is serious.

@Jordan Mendler
Before giving up equity, I'd compare the bank structure against a value-add bridge option that can potentially fund part of the CapEx. The cost of debt will be higher, but if it materially reduces the $550K equity requirement it's worth comparing both structures side by side. With 28 units, current NOI/occupancy and stabilized value would be the key pieces.
0 Reply
- Jordan Mendler
  OP
  Investor · Los Angeles, CA · Member since 2022 · 15 posts · 9 votes
  2mo
  Quote from @Vijay Friedman:
  
  Quote from @Jordan Mendler:
  
  Hi all,
  
  I came across a really good deal in Columbia, SC that is a value-add. Deal level IRR is 31% annualized and average Cash-on-Cash is 16%. It is 1.2million and needs another 250k in CapEx. I can get bank financing at 80% LTV, but would need another 550k in cash for the down-payment, capex, and reserves. All of my cash is tied up in 2 other projects and while I have significant equity in those projects, I can't access due to a variety of reasons.
  
  Does anyone have any suggestions as to how to get the deal done? It could be a capital partner or aspiring syndicator. I am happy to bring on equity partners and open to preferred equity arrangements. I am happy to share my underwriting and a pitch deck with anyone that is serious.
  
  @Jordan Mendler
  Before giving up equity, I'd compare the bank structure against a value-add bridge option that can potentially fund part of the CapEx. The cost of debt will be higher, but if it materially reduces the $550K equity requirement it's worth comparing both structures side by side. With 28 units, current NOI/occupancy and stabilized value would be the key pieces.
  
  What do you mean by value-add bridge?
  0 Reply
Jordan Mendler
OP
Investor · Los Angeles, CA · Member since 2022 · 15 posts · 9 votes
2mo
To clarify I can get 80% ltv conventional at 6.5%. but they don't allow seconds because they want me to have skin in the game.
0 Reply
Jordan Mendler
OP
Investor · Los Angeles, CA · Member since 2022 · 15 posts · 9 votes
2mo
I have done deals before. They are a lot of work. I have existing developments in progress so I'd rather spend the extra time on those than waste them on something where I'm giving up 90%. I'd be open to giving up something more fair like 30-50%
0 Reply
- Jamie Parker
  Real Estate Investor · Memphis, TN · Member since 2016 · 441 posts · 145 votes
  2mo
  Quote from @Jordan Mendler:
  I have done deals before. They are a lot of work. I have existing developments in progress so I'd rather spend the extra time on those than waste them on something where I'm giving up 90%. I'd be open to giving up something more fair like 30-50%
  
  If you dont want to close the deal because of the low equity, I may have the connections that could put the deal together. What are some of the numbers on the property?
  0 Reply
- Jordan Mendler
  OP
  Investor · Los Angeles, CA · Member since 2022 · 15 posts · 9 votes
  2mo
  Quote from @Jamie Parker:
  
  Quote from @Jordan Mendler:
  I have done deals before. They are a lot of work. I have existing developments in progress so I'd rather spend the extra time on those than waste them on something where I'm giving up 90%. I'd be open to giving up something more fair like 30-50%
  
  If you dont want to close the deal because of the low equity, I may have the connections that could put the deal together. What are some of the numbers on the property?
  
  I'd be open to a JV and take some equity in the deal. It is 31% IRR. 16% cash on cash.
  0 Reply
- Jamie Parker
  Real Estate Investor · Memphis, TN · Member since 2016 · 441 posts · 145 votes
  2mo
  @Jordan Mendler you know the debt yield and expense ratio?
  0 Reply
Jamie Parker
Real Estate Investor · Memphis, TN · Member since 2016 · 441 posts · 145 votes
2mo
Quote from @Jordan Mendler:

Hi all,

I came across a really good deal in Columbia, SC that is a value-add. Deal level IRR is 31% annualized and average Cash-on-Cash is 16%. It is 1.2million and needs another 250k in CapEx. I can get bank financing at 80% LTV, but would need another 550k in cash for the down-payment, capex, and reserves. All of my cash is tied up in 2 other projects and while I have significant equity in those projects, I can't access due to a variety of reasons.

Does anyone have any suggestions as to how to get the deal done? It could be a capital partner or aspiring syndicator. I am happy to bring on equity partners and open to preferred equity arrangements. I am happy to share my underwriting and a pitch deck with anyone that is serious.

@Jordan Mendler

I thought it best to go back to your original question. I know I guy that may be interested. If you want to stay in the deal, 20% and managing from California would have to take a real consideration. But ill ask him if you are interested.
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