Creative RE Financing. A BiggerPockets $625,000 Joint Venture
I'd like to highlight a deal that we recently closed. It was a partnership with another bigger pockets member. @Anthony Russell from sunny California.
This deal took about 4 months from offer acceptance to closing. It had A LOT of moving parts.
1. Bigger Pockets Joint Venture.
2. Out of state investing.
3. Cross collateralization of property.
4. Bank Financing.
5. Owner Financing.
18 units. (3 six unit buildings)
Cap rate. Just above 10%
Location: Brooklyn Ohio (Southwestern suburb of Cleveland, Ohio)
JV Terms: 50/50 Ownership split between HWPG & Anthony Russell.
How the deal went down
We agreed in principle with the seller to purchase his buildings for $625,000.
We were coming in with a bank loan of 75% ($468,750.00) The PITI on this loan is split 50/50 between Anthony Russel & HWPG.
The owner of the buildings agreed to cross collateralize & place a mortgage of $90,000.00 @ 6% interest on another home in the area that HWPG owns,
Anthony Russel came in with the other 12.5%
All & All It has been a win win for all involved.
We are very pleased with the purchase & our partnership with Anthony. We look forward to many more deals with him in the future.
Anthony is pleased to passively invest in Real Estate while leveraging his money as much as possible.
The seller is happy to liquidate & still earn a return on his money.
The tenants are happy to receive some more hands on property owners.
Since we have closed We've been busy working on some deferred maintenance on the buildings and are looking forward to some gradual rent increases.
Thanks for reading.
If you are interested in passive real estate investing in the Cleveland Ohio market please visit our site www.HoltonWisePropertyGroup.com for more information.