1.2 Million

[Account Closed]

There seems to be too much money left on the table that even for someone extremely allergic to risk, it seems to make some sense also rehabbing and selling the property to a retail buyer. 

I am looking at securing $1.2 Million for a fiscal year which should fund both the acquisition, rehab and resale of approximately 10 SFR units during a fiscal year within a specified market.

The numbers currently seem to add up to about 59% for acquisition, rehabbing, some administrative and resale/marketing cost. Profit is somewhere in the 41% range.

The difference being that instead of running around with each deal to secure wholesale funding, have nightmares about a rehabbers' financing source bailing out last minute, a seller that is increasingly curious about the legality of the whole transaction, coupled with a somewhat high or higher cost of funds, you can simply spend more time filtering through to find very good deals and have more control over the funding process.

I would like to hear from some other users on the site, whether corporate finance gurus, investors or financial professionals, who may have had to secure funding for similar entities in a similar industry. What sort of margins, financing options and strategies were in play?

[Josh Eitingon]

@Account Closed and @Josh Caldwell.  I agree with Josh, that it makes sense at a high level.  That said, the company that I worked for started with the fund approach rather than the individual deal syndication model.  There was enormous pressure to keep that money moving.  A couple of deals not closing and/or being dragged out can really hurt the investor yields.  

Best of luck,

Josh