Small MF under contract, ready to syndicate, now what?

[Mauricio Ramos]

Hello BP,

I have some experience with owner financing and in multifamily but havent syndicated/closed on a MF property with commercial bank financing. 

I have an 8 unit apt under contract in Texas, numbers are great, have a few investors interested in the deal, acquisition fee is setup, equity/cashflow to investors distributions are setup, basically ready to pull the trigger. My question is how to handle the investors' money? The idea is to set it up in a way of deal sponsor / passive investors setup where they get a quarterly distribution and equity in the deal, and for them to be a limited member of the asset that will eventually own the property.

1) Do i get it and give them a promissory note with the terms?

2) Do i create the LLC first and then get the money? Or do i get the money first and then go and create the LLC?

3) Do i get the money or do they wire it to title directly prior to closing? 

What is the best way to do it when trying to syndicate and give the investors their quarterly cashflow, etc.

Thanks for your help!

Mauricio