Updated almost 13 years ago on . Most recent reply
Need a funding partner...
OK, OK...we are getting off the sideline and into the game.
We are looking for a "funding" partner. A POF will be requested, at the appropriate time.
Preferably someone has done "this" before on a project by project basis; will have a signed understanding in place before any real estate contracts are signed or work is done.
Right off of BP, here are negotiable terms to get the conversation started:
- Who is putting up funds and how much are they giving?
- What is the percentage split of funds?
- Who will be actively managing the property?
- What will each partner’s specific responsibilities and expectations be in the day to day care of the property?
- Who will be on title?
- Who will apply for the loan?
- How will expenses be covered?
- How will future capital contributions be dealt with?
- How will any monthly profits be split?
- Exit strategy, predetermined and agreed upon.
- If sold, how will the proceeds be split?
We, Tidaback, LLC look for class A & B properties that can pay for themselves; 50+ units, CAP rate 8% +- 1%, DCSR 1.1-1.4 range, Breakeven range 85% or less and an expense ratio of not greater than 65%.
If we cannot make money on the front end and have the portfolio pay for itself monthly we do not pursue. We do not get emotionally involved, we are a strictly numbers business.
What we offer is due diligence, management experience, budget expertise and honesty for a long-term relationship.
If this interests you, please contact me.
Most Popular Reply
Russell, I doubt your posts will be deleted simply because you are having second thoughts about the wisdom of your words.
Bigger Pockets participation is extremely valuable, but it is most valuable when people are extremely upfront with who they are. I agree with Don that the tone of your post implies experience that you don't have. You might do some searches here on BP to see what others have said in the same circumstances.
Direct real estate investing experience is critical when obtaining financing for 50+ unit acquisitions. For purposes of this discussion, let's assume that you would be obtaining conventional financing for the purchase, and that the money partner you are seeking is to provide the downpayment. If you don't have direct experience with multifamily investments, you are putting your partner's money at risk, because you don't know what you don't know. In addition, you will have a lot of trouble getting conventional financing with no direct experience, because not only is the cash flow of the project a primary consideration when the bank looks at your application, but so is the experience level of the primary borrower. They will sniff out your lack of experience and you'll be dead in the water. If you are implying experience you don't have, it's even worse, they'll shut you down, and you won't even know why.
@Don Konipol has lots of experience in this area, far more than I. But both of us get lots of calls and emails from people implying experience they don't have. It becomes very obvious when we're been through it so many times. So suggest you start smaller to learn the "you don't know what you don't know" stuff. If you don't have cash, you don't have experience, and you don't have an inside track on a killer deal, you don't bring much to the table for a funding partner.
Not an attack, just a reality check, good luck to you.