How to structure multifamily deals with a small number of accredited investors

[Gerardo Waisbaum]

It is clear that syndication is the way to go for large multifamily deals where you need to raise capital from a large number of investors (I've done it in previous deals).

However, I'm interested in learning ways to structure multifamily deals with a small number of accredited investors. What are some common ownership and profit structures that you use?

For example, I'm currently working on a deal that requires me to raise around $1.6M from 4 investors who will each contribute $400K. I will contribute sweat equity as the general partner and will be responsible for sourcing, executing, and closing the deal, including DD, asset-managing the property, and eventually selling it.

How would you structure such a deal?

I appreciate any insights or advice that you can share.

[Chris Seveney]

@Gerardo Waisbaum

I would structure it as a partnership where you have the LLc and every member plays an “active” / decision making role but you still manage the day to day.

If everyone has an active decision making role then you should pass the howey test

As far as returns that can vary significantly on what you provide as well as the hold period