First Deal w/ Partner Financing

[James Mckenna]

Hello!

I've come across a deal through a friend, they are selling a 4-unit complex, 1bd/1ba, 500sqft each unit. They are asking $260K, brings in $2650/month in income. 2 units are under rented but those tenants have been there for 20yrs/7yrs. Based on current #'s/expenses + mortage, comes in at about a 10% COC.

Found a friend of mine that is willing to put up the downpayment ($60K) and go in on the deal with me.

What i’m struggling with is how to structure/make appetizing for the investor, to ensure long-term desire to do more deals.

The property is a little older, 1920, will need a new roof in about 3-4 years, and all tenants are month-to-month, so if needed, we could vacate some units with notice to fix up and get total

Income to about $3K/month.

Questions…

- noting the potential new roof in 3-4 years and repairs to fix up units for higher rents, what would you do in terms of the offer price?

- is 5% COC for the investor normal in a scenario like this? In addition to 50% of the equity. Plan to do more deals with OPM and learning best way to approach these.

Appreciate any opinons/insight you guys may have. Trying to turn analysis paralysis and turn it into action. But don’t want to rush a deal that could cause issues with additional expenses (roof, repairs, etc).

Thank you!!!