Using private capital for EMD on Multifamily property

[John Cameron]

Is it common for apartment syndicators to raise private capital or use Hard money to use towards EMD of a property? With EMD typically being around 1% of purchase price, your EMD along with other up front fees can be much more than most investors have in liquid cash. Is this common and what are the pros and cons?

[Jim Kittridge]

@John Cameron

If a syndicator doesn't have funds for EMD out of pocket, that would be a sign that they don't have enough experience. I'd be willing to bet they are fresh out of a bootcamp or training seminar.

In my opinion, you should start with smaller deals and cut your teeth on those. You will learn a lot and be able to do better by your investors in the future. A $5,000 lesson across 300 units is painful.