How much cash do I need to contribute when sponsoring this deal?

[William Kyle Walker]

Hi private equity folk,

This question has 2 parts 

1) How much cash do I need to contribute to the $1,875,016 of equity in order to get it funded by a private equity partner? 2% 5% 10% 15% 20%

2) How much is acceptable to get back as an acquisition fee?

Outline of the deal:

SF: 93,461

PP: $4,050,000 ($43.33psf)

Capex: $508,000

Title & Survey: $16,000

Broker's Commission: $101,250 (2.5%)

Total Acquisition Cost $4,687,654

Equity $1,875,016

Loan Amount $2,812,593

Loan Costs 1.00%

LTC 60%

Interest Only

Interest Rate 3.50%

Going-in Cap: 7.73% at 66% occupancy

General Vacancy: 8%

Market Rent Growth: 3%

Exit Cap: 8.5%

3 Year Hold

Residual: $54.64psf

Unlevered IRR: 9.1%

Levered IRR: 15.5%

Equity Multiple: 1.47