Structure of a syndication deal. I'm promote + land

[Tommy C.]

Hey BP,

I’d like some feedback on how to structure a syndication deal on an 8 unit MF for rent apartment with myself and 3 outside investors / friends. I've never syndicated a deal and only have some basic knowledge of the process. I've never been on the preferred end or the promote end of any deal, so I’m curious how to structure it in an appealing way. 

Ideally this deal would be put together for the 20% equity required to finance the new build. I have multiple parcels in mind that are appropriately zoned for this type of structure. 

At a high level, I believe this is a an 11.5% cap and 10% IRR immediate cash.

Here are some more details: 

• - Yearly NOI = $120k
• - Deal ends after 5 years
• - $120k x 5 years = $600k
• - $600k - $400k = $200k total gain => (5 year gain - initial investment = total gain)
• - $200k gain / 4 people = $50k per person
• - $50k gain per person / 5 years = $10k per year (or 10% IRR)
• - Quarterly immediate cash payouts from rents will be paid back to investors upon receipt.

Would this deal make sense? Does anyone have any resources on what a typical agreement looks like? 

I want to get a sense of what a favorable offering would look like for 3 outside investors. The benefit for me is that I would own the building outright after year 5. 

Any tips would be appreciated,

TC