Need advice on funding class A SFR portfolio

[Kris Reeves]

I am not new to investing, but I am very new to deals like this, so let that serve as my disclaimer!(but that's what BP is for, right?) My wife and I have a 3-5 year plan that includes 50-100 SFR. I have found a nice portfolio that fits our strategy, so what I am seeking is advice on funding it. Anything you guys can contribute would be greatly appreciated. Here are some general details:

20-30 SFR, all under 4 years old. 100% occupied class A rentals that are cash flowing nicely. Asking price +/- $3,300,000, so 20% down is roughly $660,000. I have $50,000-75,000 cash to put down, maybe more, and I am looking for my options for the remainder of the down payment. I can get the loan for the remaining balance at around 5.25% for 30 years. This being the largest transaction I will have made to date, I am not sure what my options are. Ideally, I would like to have an investor come in with the $600,000, get the transaction complete, then sell off 3-5 of the properties to pay the investor their investment plus our pre-established return percentage/equity. I would assume this process would take 6-18 months, given existing lease agreements, time to sell, etc.

So in a nutshell, we would be looking for $600,000 for 6-18, 24 month tops. My wife and I are both high W2 earners with perfect credit. We do not need any of the cash flow, so our intent would be to get the investor paid of ASAP, as in all additional monies would go to our investor first. 

Please give me your thoughts on this deal, getting it structured, what a potential investor would like for a return, if equity in a few of the properties instead of percentage would be more attractive, and anything else you can contribute. If you are interested in assisting with this deal, please pm me. Thank you guys!

[Jay Hinrichs]

I think @Percy N. gave you some pretty straight up advice.

in your first deal it could be hard to find an investor who writes a 600k check.  many that can will just do these deals themselves.

However this could be a prime time for you to establish a little LLC investor syndicate of KNOWN individuals to you.. say you each throw in 100k.. you get the pref return for finding the deal and running the railroad..

What I see most folks do when they are starting out .. they want to do these deals like they are a very seasoned or experienced syndicator / investor and are looking to make the lions share and finding the cheapest capital they can find.. this is all well and good unless you never find the capital and never do the deal.

So when starting out and if these are the types of transactions you may want to repeat.. you need to turn the tables you need to make it so good for the investor they simply can't say know.. you give the investor the bigger slice of the pie.. and thereby secure your first big deal.. once you gain experience and track record you can then start to increase your return and lower the Private investors return as they are aligning themselves with an experienced and successful operator.

Let me know what you think... this model has worked well for myself over the years.. You would be surprised how well received this thought process is.