Help structuring a deal

[Gary Charlton]

Hi All,

I have been trying for sometime now to drum up some investor capital to be able to purchase a multifamily apartment building in FL. The problem is that being new to investing in multifamily buildings I am having trouble selling my deal to them. At first I thought it was just my experience which I could understand. As time went on I was wondering if it was perhaps the way I was structuring the deal that was the problem. 

So the deal is for $1,200,000 purchase of 21 units. I am asking for an investment of  $300,000. Generating gross operating income $190,000 with $80,000 expenses leaving $110,000 after taxes and interest left with $60,000 profit in the pocket.

The way I am structuring the deal is that If the investor puts up $300,000 they will have 85% ($50,000) of the profit and being that I will be doing the day to day managing of the deal 15%($10,000) per year. 

I have in my business plan revenue increasing methods (market rent, Washer dryer in room) as well as the rehab of units starting year 2 to increase rents. The deal at this stage is structured on a 5 year investment with a potential to stay in the deal for another 5 years.

Am I taking to much of the profit and therefore putting potential investors off the deal?

Am I not showing significant returns to warrant an investment?

Is the deal and the deal structure ok just that because I am new peolpe dont trust me enough?

Any help about my current situation would be greatly appreciated.

Cheers

Gary