All Forum Posts by: Ben Tedla

Quote from @Dan H.:

You are 8 months into a planned 48 to 60 month hold.  For that reason alone, 1/3 does not make sense.  In addition, a lot of work such as finding the property, underwriting it, negotiating it is done up front.  There is no way I would be offering a full equal share.

To put it in a different view, what if he came in at year 2 on a 4 year hold.  Would you be offering a full 1/3 pertnership?  Maybe if you were desperate for capital but under normal circumstances it would be foolish.  You would already be 50% of the way through the lifecycle.  Even offering 50% at this point would be underselling the work and risk of the earlier part of the acquisition.

Assuming you are not desperate for the funding, I would offer no greater than 27.5%.  This number was derived by 40 (min months left)/48 (total months) * 33.  I would likely reduce it to 25% to compensate for the heavy lifting of initial acquisition effort.

Good luck

Thanks for the feedback Dan! Definitely some pros and cons that I have to carefully weigh in. 

Quote from @Theresa Harris:

If his capital will speed up the reno, you and your brother will save money in terms of interest.  I'd split everything 1/3.

Thanks for the feedback Theresa! Great point and very true. A lot to consider for sure. 

Quote from @David Hill:

I have no experience whatsoever but from a management perspective with the end result of success, I would ask the question if this third individual was at the table day one, would it have made a difference? It sounds like he has a skill set that is of value. So could the deal potentially have been better? I completely understand where you are coming from valuing the work already put in but at the end of the day, more capital, quicker results, quicker tenants. Also knowing your strategy would also help. If you’re looking to flip or hold might lean slightly one way or the other. How long have you and your brother been working on the project?

Thanks David! Great question regarding the outcome of this particular deal if he was at the table from day one. Maybe he would’ve persuaded us to make certain decisions differently but I guess we will never know :)

We started working on this deal in June 2022 and our current plan is to hold for approx 4-5 yrs. 

Hello BP! Here is my situation and hopefully someone can provide some recommendations on path forward. My brother and i recently purchased couple of multi-family buildings. It’s a value add project so we’re in the middle of renovating several units. A good friend of mine wants to join the project by contributing an equal amount that we spent thus far (1/3 of the down payment; 1/3 of the closing cost etc). Since we found the deal; underwrote the deal; got it under contract; did the due diligence and market research; got a mortgage and successfully close on the deal, it doesn’t make much sense to split the NET rental or NET sale three ways (even thought he’s putting the same $ amount). He doesn’t plan to be a silent partner so his help in various areas of the project will come in handy. Furthermore, we can definitely use his capital to speed up the renovation process and provide more security cushion during this uncertain time. 

This is my first time entertaining such arrangement so would love to hear your thoughts or what is considered a ‘fair’ percentage for this particular scenario. 

Good morning BP! I'm looking to connect with a commercial lender that services Norfolk, VA. Plan is to purchase a multi-unit apartment building in Norfolk via 1031 so need a company that is reliable with decent turnover time. Any and all recommendations are welcome.

@Charles Carillo - I’ve reached out to a few local banks and no-go so far. Was informed that they currently don’t have the “appetite” to lend to out of state investors (was told it was a different case couple of years go). I haven’t given up on that avenue so search continues but was wondering if anyone had a recent success story getting a loan on portfolio deals. 

Hello All. Need some advice. So I am an out town investor and have a potential deal in play that is comprised of scattered multiple multifamily buildings in Cleveland area. Properties are in great condition with stabilized occupancy and are located in “B” class area. 

With that said, I’m planning to finance 1M+ and put down approx 30%. Any pointers on lenders that will do a 30yr fixed mortgage on such buy-and-hold deal? All feedback/advise is welcomed and absolutely appreciated! 

@Marc Rice - Thanks Marc! Looking forward to it.

@Remington Lyman  Please do. That will be great! 

Hello BiggerPockets family! New member here. :) I'm an out of town investor looking for a reputable and reliable commercial lenders in the Ohio area. Planning to put down 20-30% on a buy and hold stabilized cash-flowing apartment building (20+ units). Any recommendations for potential lenders that may a good fit is greatly appreciated! 

Thanks all!!