Multifamily investment first timer

[Kaushik Sarkar]

I am a single family investor looking to make a first multifamily investment in a friend's company where he is the lead GP. Need advice if this is worth looking into.

The property has been negotiated at a 20% discount and 7.6% tax adjusted cap rate. 70% LTV with Freddic Mac loan. Agency loan processing at 5.5% fixed interest rate. Class A1 investor - 8% annual return and total return of 1.8-2X

[Jay Thomas]

Exploring an investment in your friend's company is a promising opportunity for wealth-building. Highlights of this multifamily deal include a substantial 20% discount, a commendable 7.6% cap rate, and favorable financing with a Freddie Mac loan. While the mix of business and friendship requires clear expectations and contracts, it offers a unique chance for collaboration with someone trustworthy. Limited information about the property and market trends presents an opportunity for thorough exploration. Promised returns, although ambitious, could contribute significantly to investment success. Embrace uncertainties by understanding the reason for the discount, evaluating management expertise, and developing a clear exit strategy. Before committing, conduct due diligence, seek independent financial advice, consult with legal experts, and have open conversations with your friend about expectations and potential conflicts.