Tips to find equity partners?

[Gabe Goudreau]

Could anyone share some tips on finding equity partners for small-to-medium (5-20 units) value add multifamily investments? Should you find these partners before you have a deal on hand, or should you find an opportunity and offer a partnership with returns projected after an analyzation of the property? I have heard stories of newer investors partnering with individuals with more capital by having the partner put up the money for acquisition costs, while the newer investor is responsible for any rehab and property/asset management associated with the project and the equity of the property is split 50/50 or 60/40. Is this just a rare occurrence, or would I need to be considered "experienced" to pull something like this off? For some background on me; I have not made an investment yet, but I have basic skills in apartment unit renovations, multifamily underwriting, and a small amount of capital to deploy. Loaded question(s), I know, but I would any insight - thanks everyone.   

[Brian Adams]

@Gabe Goudreau, I have traveled down this path already and I can share some quick things that I went through, you can check out my background on this thread: I quit my CPA Job to buy Large Apartment Buildings

From my experience and since this is your first deal, the arrangement you shared of 50/50 or 60/40 would definitely be rare.

You will probably need a loan sponsor and you need this person more than they need you. Someone with experience, liquidity, net worth, etc. to get the deal done.

Be prepared as the loan sponsor will want a piece or most of your deal.

I did struggle with this at first, like why it wouldn't be a 50/50 split since I found the deal and putting it all together. I realized though that a piece of a deal is way better than zero or no deal.

For me, getting a piece of the deal, I was able to leverage and turn that into building my track record and credibility.

So much so that years later I just bought a 1,000 unit deal.

To find equity partners, you must ABM - (Always be Marketing) and BP is a great place to locate and also friends, business associates, CPA, attorney, dentist, doctor.

And for a loan sponsor, also BP is a good place to ABM.

Good luck!!