High Net Worth Individual

[Melanie McDaniel]

My partners and I have been prepping to take down a large multi-family. We have an off-market opportunity but it is a lot larger than we planned to take down and we are beyond our circle of high net worth individuals. The opportunity is worth chasing, so my question is, how I we find someone worth $40mil?  Ha! Great problem to have I suppose.

Thanks in advance : )

[Brian Burke]

If the purchase price is $40 million, and the down payment is 25% your loan would be $30 million.  So you really only need $30 million net worth (or sometimes less depending on the lender). And it is cumulative, so if you have three people with $10 million net worth each, you’ve covered it. and if you and your partners have some net worth you can count that toward the $30 million, too.

Finding three people with $10 million net worth is far easier than finding three people with $10 million NW who are also willing to sign your carve-outs.  If they are investing in the deal, the bridge over the gap is shorter, but it’s still a steep hill. People who have accumulated that level of wealth are usually more concerned with containing risk.  And despite the narrow scope of typical lender carve-outs, many people see that as having some risk.  So you’ll have to find several options to choose from because you won’t get a yes from all.