Syndication or Partnership?

[Brittany Sanchez]

Greetings BP Community!

There is a 21-unit apartment building that is for sale in my area. The owner is willing to do Seller Financing with $200,000 down. The problem is my husband and I don't have $200,000 cash (banks want around the same amount for the down payment and closing costs). I haven't put in an offer yet because I don't want to waste the seller's and our time if we cannot even secure the financing for the acquisition. 

To raise the funds/obtain the property, would it be best to form a syndication or a partnership? 

Thanks in Advance! :) 

[Tamiel Kenney]

@Brittany Sanchez  Hi Brittany!  If the deal is good, it is very likely you can find someone to partner with you on the deal or do a small syndication. If you do a syndication, there are many rules because it is considered a "security" and you need to make sure you understand what you can/cannot do. Rules determined by the S.E.C. (Security and Exchange Commission).

I would not necessarily promote paying a higher price, but…if the deal still meets your criteria at a slightly higher price, you could try to negotiate with the seller and offer a higher price in exchange for a lower down payment.

Also, I am not sure if you have purchased properties before, but if you are considering taking other people’s money, make sure you go through a very thorough due diligence. Ensure you engage a 3rd party to do the due diligence and ask them for sample reports they have done in the past. Also, make sure the due diligence company provides quotes for repairs. Some companies provide a report with no estimates for repairs and this is somewhat useless unless you know what it takes to fix the identified issues.