Best Strategy for Capital Partner Investing

[Jonathan Weinberger]

Hey guys, 

So I'm heavily investing in SFH's throughout the Detroit markets. I've invested around $1.6M of my own money with capital partners interested in Real Estate matching $ for $.

I'm about to be 25 doors under management, and I'm looking to significantly scale this further. Here's a real deal that's closed under a capital partner where I matched $ for $. 

Year 1, cash on cash return at 9.46% 

Over the next 10 years, here are the projected overall returns with 5% year over year rent growth, 3% year over year appreciation of the property, and calculations for tax savings + debt pay down: 

I'm a buy and hold investor. My capital partner for this deal, we're $ for $ match. I'll never sell this property. 

$ for $ match is easy. I'm putting in my own money, which I am happy to do. In my network, capital partners are offering $500k match for match. 

The bank of Jonathan is drying up. 

I'd love to know how you would present a deal like this to a capital partner where I can be $0 in the deal. And after 5 years, I somehow own 100% of the deal. I figured this would be an exciting post to brainstorm how others JV on deals. I've heard stories about people saying because they source the deal and manage the properties, they get 50%....

I want to know how I can source the deals, manage the team, the properties, and in 5 years, I walk away with 100% of the property and my initial investment in the deal is $0.

What terms do I need to offer? How would this deal be structured?

If you have resources you recommend on using OPM -- I'd love to see them!

Additional info to help the discussion: 

Rent growth year over year:

Appreciation Growth Calculator (Conservative 3%)

 

Scenario: 


Total cash in deal from Investor: $29,010


Investor Contribution: 100%
My contribution: 0%

Goal: Figure out how in 5 years, I now own 100% of this property. Investor needs to somehow recoup their initial investment of $29k + whatever would have made this deal worth it for them.

Heck, maybe I could just do 50/50 partners and hold the properties for life together and still be $0 in the deal. 

Discuss :)