Person wants to do a buy in partnership

[Drew Oberholtzer]

I have an interested party that would like to buy in to my real estate portfolio.  The current valuation is $1 million with a debt service of $300,000.  If he wants a 25% stake in the portfolio what is his buy in amount?

[Debra Grumbach]

another thought - what is the cash flow? The partner will be "buying" a piece of the cash flow as well as a 25% share in the equity. If he invests $175K, what would be his annual cash flow from this? Perhaps use a multiplier on that. If annual cash flow is $70K, buying in at 25% gives him $17,500 of that. That gives him an instant ROI of 10%. If he buys in at $200K his ROI is 8.75%/yr.