Sourcing a large down payment through syndicating?

[Justin Polston]

Hey all!

So my 2020 goals have been to really take my brokering skills for a thrill ride, and phase out of doing normal consumer deals.

"Path of least resistance" has led me to network with 2 dozen folks that have 10-50k to invest (which you can't buy anything around me for 40 that doesnt need another 40).

That same path is also turning into package deals, whether 3-5 or 5-10 here and there.

Current problem that I'm trying to help with. We have an 88 unit package near Indianapolis but also maybe 45 minutes from Cincinnati, sitting on I74.

Without getting much into numbers, the deal is cashflowing well with 55k in monthly rents, 5% vacancy, and allotting for average $80k a year in maintenance and capex.

The seller wants XMillion

I have buyers ready who can pull off an 80% LTC loan. My brain starts hurting when we get to discussing the 20%. Roughly $500k-1m.

Is this a crowd funding answer? Should I reach out to my network of smaller (relatively speaking) amounts that would want to be partners debt or equity or both?

Interested in what others would suggest!

[Don Konipol]

@Justin Polston

Accredited investors have lots of syndication investment choices these days. Most opportunities are easily accessible on the internet. Here’s what investors are looking for in a syndication besides a minimum return on investment, first year tax write offs, and a deal fitting into their risk parameters

1. Syndicator track record of success in the type of investment opportunity being offered

2. Offering filed with the Securities and Exchange Commission

3. Syndicator investing his own capital under same terms as outside investors

4. Professional, experienced property management

5. Limited upfront and continuing syndication fees, and syndicator reward only after the outside investors receive their investment back and a minimum annual return

6. Professionally prepared Private Placement Memorandum, Operating Agreement, and Subscription Agreement

7. Ability to track their investment, distributions, property operational results, etc. on line, and in real time.

8. Distributions automatically ACHed to their designated account.

9. K1 and other tax information provided in a timely manner.

10. A continuity plan should the lead person running the syndicate become incapacitated

11. A central online deal room where appraisals, purchase contracts offering documents, photos, financial projections, financial reports, tax returns, etc. are available to be viewed.

12. Protection of their financial information shared with the syndicator.