All Forum Posts by: Jesse Daconta

This sounds like a question for @Dave Foster

@Roy Marks

It works well with a multi-million dollar complex because the loan guarantor usually signs the loan for a team that has a proven track record. It's a quick buck for the loan guarantor (sometimes they reinvest the fee into the limited partner side).

What I'm proposing is the following:

Scenario 1 (no fee paid to B): B receives more than 90% of the LLC between B and N because B is putting up 90% of the funds and signing for the loan. N receives less than 10% of the LLC (whatever % deduction you guys agree on for the risk of the loan defaulting). B still puts down $225k and N still puts down $25k.

Scenario 2 (fee paid to B): B receives 90% of the LLC + $30k from N and N receives 10% of the LLC because they're only bringing 10% of the money and don't have the risk of the loan defaulting. B puts down $195k ($225k - $30k) and N puts down $55k (original $25k + $30k fee) + the % breakdown above for scenario 2.

I might make this sound more confusing than it actually is lol. Sorry!

Best,

Hey,

I wouldn't trust N as a property manager unless he had a lot of experience in this space.

B should receive more than 90% equity in the LLC because he has the loan in his name. This isn't a commercial building so it's probably not a non-recourse loan.

In the commercial real estate world we give the loan guarantor (person signing for the loan) a lump sum of 3 - 5% of the loan (or 0.5% - 1% if it's non-recourse). However, it's a one time payment and they don't receive equity. In this case B would have a loan in his name for $680k (20% of $850k = $170K) so N would give B $20,400 - $34,000 up front for the risk of the loan.

Or if N doesn't have the money to pay B for the risk of carrying the loan, he could receive less equity for his money.

Just another viewpoint :)

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@Jennie Berger

I'm not not about linking with Carrot but you many want to try "Less Annoying CRM". It has a 60 day free trial period and it does everything we want. It only costs $10/month once the trial is over.

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Over 90% of all syndications are 506b. Only 4% were 506c (2019). People will naturally follow the point of least resistance - they most likely won't take a series of exams. My 2 cents :)

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Hey,

I have sources of capital. Let's build a relationship and close some deals.

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I recommend you read the book: Long-Distance Real Estate Investing by David Greene. It covers everything you mentioned besides specific areas to invest (every area has deals with the right team in place).

However, don't be fooled. Long distance real estate is not passive investing.

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@Vee Vu

There's a conflict of interest with the GC getting paid for the renovation. It would be better if the GC was getting reimbursed for only materials at sale + 30% profit. In this case they would put in sweat equity and you would put in a down payment (not to mention that you take all of the risk with hard money).

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Read The Best Ever Apartment Syndication Book by Joe Fairless. You'll thank me later!

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@Mike G.

Unfortunately, there isn't. Anything 506B related must be done through word of mouth/relationships (no advertising aloud). The only syndications that can mention their rate of returns are 506C (only accredited investors).

Let me know if you want to talk more about it.

Best,