Figuring out syndication

[Amir Khan]

So I am looking at available properties that I could possibly syndicate (while I am experienced with residential real estate, I am relatively new to commercial RE). Here is a situation:

- Property type: bank leased NNN

- Cap rate of 5.%

- Asking price $2.2 million

- NOI: $110K

If I wanted to put this together, financing it with 20% down ($440K) by bringing 10 investors together each bringing in $44K, the deal will yield 25% cash-on-cash for each investor (NOI/no. of investors = 110K/10=$11K/yr, return per investor/cash investment per investor = $11K/$44K = 25%. In addition, each investor will be offered equity in the property and profit sharing when pursuing exiting strategy. Are my assumptions and calculations correct? If you were to structure it how will you do it? What are the pros and cons?