Raising for a 16-unit: Wholesaling, Private Lending, Partnership?

[Susan Elliott]

Hello Community,

Our deal funnel has brought us a 16-unit apartment building outside of Portland, OR in the Columbia River Gorge. I've done a lot of underwriting (to play out multiple scenarios and practice underwriting bigger deals) and there are definite value-add opportunities here. I have a great relationship with the broker, a commercial lender who has confirmed my underwriting and a local property management team. My partner and I have a small (and growing) network of investors, but we currently have less than the $390,000 required to get this deal funded (down payment, rehab, reserves).

We wanted to present the opportunity to our network as a conversation starter before we made an offer. Thus, I don't have a contract yet, but would like to move on that this week. We have both done single family rentals and small multi family rentals, so a 16-unit feels like a great natural next step for us. Plus, it is local to us. We decided that if we feel like we could raise the capital, then we would make an offer and return to our investors to ask for "harder" commitments.

My question is whether anyone has wholesaled multi-family properties of this size? I'd love to take the next step and get this property under contract, but I'd like some additional exit strategies in case we can't raise the capital required. I'd be happy to provide other financials if anyone is interested.

Are there any capital raisers out there who would like to take a look at this? It will be a JV due to the size of the deal, thus, we aren't looking to bring on many other managing partners.

Finally, I don't think hard money lending will work here since the value-add benefits will give us smaller returns in year 1 and bigger returns in year 2-5. But I'm open to any ideas for financing!

I'm also thinking I'll start tossing around some numbers to see if there is a seller financing option that may work for the seller and for us.

I'd love to hear any ideas, experiences, or insight here. Happy to provide more information on the numbers too.

Cheers,

[Susan Elliott]

@Tchaka Owen Yes, I have thought of that! I will play with that scenario in some of my projections. I'll need to chat with a lender to discuss, as I haven't seen many situations where a hard money lender was willing to come in 2nd on the deed (to the primary lender for the commercial loan).

@Ronan Donnelly Yes, I do believe I understand why he is selling. He's looking to invest in another region, so I do believe he wants all his equity out soon. However, there may still be room to explore here.

Thanks for the suggestions!