Long Term Private Money

[David Edwards]

Hello all!

Any Idea how I can find long term financing partners, ideally equity based where we would split home ownership and the cashflow? I am open to discussing long term note financing as well.

For a partner funding the $80,000 for acquisition, rehab, and light furnishing and receiving 50% of the cashflow (call it $800 a month on average) this is an annual return of 12% and backed by the equity in the home. Does that seem fair? Any suggestions how I could strengthen the offer?

On one single family home (see actual numbers below) I pull in 4-6x the cashflow of $200 per door we often hear we should expect, I am looking for partners to work with me to expand this performance.

Total cash costs for Acquisition (20% down payment & other fees), Rehab, and light furnishing of the common areas and each bedroom for this home came to $80,000. Other homes would be expected to be in the $70,000 - $100,000 range for these same components with the balance of the mortgage held by a bank.

Below are actual revenue, expense, and NOI numbers for this home which we would use as a model for further acquisitions.

Property Management is high, it costs a bit to manage the placement of multiple tenants, handling of disputes, and collection of rents as well as mange the cleaners, landscapers, and handymen.

The 2.5% for maintenance, and 5% for capital expenses would be variable but should not be much higher than 5%. Keep in mind this is based on gross revenue and our gross revenue is very high at $5,000 with full occupancy. As an FYI, the home was fulling covering all bills with 3 out of 8 bedrooms rented due to the variable nature of most of these costs.

In July we had a tenant turn over and some late payments captured in August.

Thanks!