large multifamily deal

[Jared Bonner]

Hello BP'ers

We have a large multifamily deal we are in the first phase of pursuing.  Its the largest deal we've ever attempted and need some "big fish" advice.

deal basics:    purchase price:  estimated  $7,500,000
                    # units:                around 70
                         80% loan            $6,000,000
                         20%  dp               $1,500,000
                       
My question is this for the big kahunas out there.....  we have the $1,500,000 down payment (mostly in other various real estate assets in multiple legal entities),  however,  this deal would "tie up"  a good portion of what is now our FREE and clear net worth....into this one deal.  It would tie up about 80% of our net worth. (and place it "at risk" I'm assuming )    Assuming the deal is at least  "average"  for a high end , lower cap rate facility, and assuming that cash flow is sufficient to produce excess "cushion" cash flow at the end of every month -   is this too much net worth to tie up into one property?   Should we be looking to tackle some smaller deals first to build up that net worth higher ?  is there a rule of thumb before pursuing these larger deals?   Looking for some advice from those that have been down this path before...

thoughts?

Thanks All!