44 Unit apartment Giving 20% of NOI and 20% of Equity..and more!

[Dennis Williams]

Good Evening Ladies and Gentlemen,

I'm looking for an equity partner that has experience in purchasing 40+ unit apartments. The 44 units are 11 buildings making up 44 units.  41 of the units are occupied and each unit is a 2 bedroom 2.5 bath.  Rents range from $725 to $800 and are currently below market of $1,000.  Now for the good stuff.  Get your pen and paper (or spread sheet) ready.

The property is located in a B-/C+ area

18 of the units are at-will tenants

23 of the units are on a current annual leases 13 of which are due for renewal between June and November. (will raise the rent at end of lease)

Current monthly rent is $30,720 = $368,640 GSI

Current Vacancy is 7%  (market is 5%) = $342,835.20 EGI 

We don't know Operating Expense yet so I used 45% after deducting EGI = $154,275.84

Net Operating income = $188,559.36

Owner is asking $65K a door = $2.86M 

About a 6.5% CAP

I am interviewing property management companies this week. I have two lenders I am considering because they are quoting a 4% to 5% interest rate and up to 80% LTV (however I need someone with experience to show the bank credibility).

Since I will be short on down payment, I am offering 20% of the NOI and we split the other 80% of the NOI, and 20% of the equity cash out at sale. I do plan on holding this property for at least 7 to 10 years. I also plan on asking the seller to carry back 10% of the purchase price and/or grant the buyer $140,000 credit.

[Avi Garg]

@Dennis Williams How much money are you putting in? You are asking for credit from the seller plus money from investors that leads me to think you have minimum to no money down in this deal. Might be worth it for you to take the 20-40% equity and give rest to the investor(s) giving you the money and bank credibility.