I need help deciding how to handle financing as a partner on a JV deal for a 70 unit apartment. 65/35 split
I have a HELOC I'm considering using to buy in as a partner on this deal. With the numbers below, does it make sense to use the HELOC? I appreciate any input as to whether or not to pursue this deal with a HELOC. My main goal is to build capital with a good balance of cashflow. Thank you!
Here are the details:
Buy in cost is 100k which would max out my HELOC @ 4.4% variable, with option to fix the rate
Plan to hold for 10 years
First 4 years Cash on Cash (pre-refinance): 8%
Average Cash on Cash for 10 years: 12%
Purchase Cap Rate: 8%
Total Return on Original Investment (Cashflow + Sale): 134.46%
Annual Cashflow Average: $7,500
Refi cash returned after 4 years: 62K
10 year IRR: 14.6%
Equity Multiple: 2.34
I would need more information about the business plan to determine if it made sense for me. Projection figures are all well and good, but the actual nuts and bolts of the plan can't be forgotten! Without that, the numbers are just numbers on a page.