Getting My Investors Big Wins

[Paul MacInnis]

Hi all,

I recently read a great success story by @Huy N regarding a deal he carried out in Texas and it made me realize that reading success stories is a great way to reinforce the awesome power of REI.

Recently I wrote a blog post about a deal I closed on a triplex and while I don't want to go through the details of the acquisition if you'd like to read more - please do so here.  (https://www.biggerpockets.com/blogs/8314/50302-pod...)

The point of this story is to tell you about how I helped to create some awesome "wins" for my investors.  

So my triplex was 127,500, I put 20% down ($25,500) plus closing costs brought me to about $29,000 needed to close.

The building was purchased under value - and expected appraisal for a refi in 12 months is at least 170k.  It appraised for 180k in January of this year.  

I won't bore you with details - but the cash-flow is approx $800/month after a few small alterations from my BP analysis were done for the JV agreements.

Investor 1 - Gave me $10,000.   He's a passive investor in that he wnats absolutely nothing to do with the property.  

He will receive - $150/month for 12 months plus a $500 bonus after the refi.  Total monies received = $2300.   2300/10000 = 23% return.

Investor 2 - Gave me $17,000.  He's an active investor and will actually manage the property for the 1st year.   

He will recieve 50% of the cash flow each month (after all expenses including CAPEX are deducted) - which will average out to $400/month.

After the refi - he will recive 60% of the difference between the amount left owing on the mortgage and the new value.  So, conservativley, at a 170k appraisal - an 80% loan will be 136k.  If we subtract approx 102k that will leave 34k.  So he will receive 60% of that which is $20,400.   This is his original 17k back plus $3400 more.  All told his return will be:

3400 + 4800 (cash flow) = 8200/17000 = 48.2%.

Needless to say - both investors are very happy!  As am I.   

This isn't an every day deal but over time, if you're consistent - these types of deals are out there.   Hope you all enjoyed the info!

[Ryan Alguire]

Paul, 

Anyone would take you up on that deal, and I can say with confidence that at least one of those investor will most definitely look to do so again in the future! If this is the cream of the crop, so be it, I'm happy to be a part of it! Thanks for the opportunity; Can't wait for the next!