RAL / ALF Syndication in California

[Adrian Mahdian]

Here are the current numbers I have on hand:

10m$ purchase price
62 beds
800 000$ down payment (on our side as investors)
Revenue: 40 beds occupied currently, bringing in $3 000 000 a year
After the debt service and all costs 900 000$ would be the profit

The operator had a family friend who was going to invest, but the friend fell through because of family issues and he has 35 days to close,

I asked him about the eventual exit and he said "I could buy out the equity partner if they want an exit!"

We would of course need to verify everything possible to see if it's the real deal!

The operator will put some money down also. He already has 3 ALF homes in california and is profitable.
This facility is already operating with a good reputation, the operators wife is also a nurse! Don't get me wrong, MORE DUE DILLIGENCE IS NEEDED!

We (the cash investors) will own 40% of the equity in total.

40% X 800k = 360k$ profit per year for our syndication which is 360/800 = 45% Cash on cash per year!

I can put down 1/4 of the DP around 180k basically. I don't have the full downpayment myself so I am now talking with RAL savvy investors to consider this.

1- How do I structure this? The operator wants to deal with 1 person, even if I bring on more partners to reach the 800 000$ downpayment. 

2- The cost seg analysis has not been done yet, I am guessing since the downpayment will be around 1m$, the 1st year bonus depreciation will be around 1m$ for the LP partners! 

// Adrian