All Forum Posts by: Alexander Wehrmann

I'm not sure I follow your math... There is $600k total equity in the house, so I'd sell $500k and keep $100k for myself. So the investor(s) would own 5/6 of the house, and I would own the remaining 1/6. They would receive 5/6 of the cash flow, pay for 5/6 of any repairs and expenses, and receive 5/6 of the proceeds from a sale.

The IRR works out to be in the mid-10% range, which is attractive by most standards, especially for a low-risk property in San Diego in a nice neighborhood. I'm an LP in some other RE investments and they pay out a 6-7% preferred return, so a fair equity split seems like it would be attractive to the right investor. I'm just not sure how to get connected with the right type of entity looking for appreciation. Most of the crowdfunding sites I've seen appear to be focused on cash flow, and less on appreciation. Thanks for reading.

Thanks both... I expect the cash flow to be barely negative/breakeven initially, and then sustainably positive by year 3, and then slowing climbing positive from there. If I put more debt on the house it will eat away at my cash flow, so I'd rather find an equity investor looking for appreciation. I know "appreciation" can be a four-letter-word in the BP community sometimes, but in a place like San Diego with SFH cap rates in the 2.5% range, it's just how it is.

Hi BP Community

I am moving and would like to keep my current house and convert it to a rental; however, I need to pull some equity out of the house for the down payment on my new house. The home is worth $1.3mm today, and I have $700k remaining mortgage and $600k equity in the house. I'd like to keep $100k equity for myself and sell the other $500k to equity investor(s) so I can keep the excellent mortgage (fixed at 3.25%) and take advantage of the cash flow and build more equity. Finding a cash flowing property in San Diego is not easy, so this is a fairly rare opportunity, and I can self-manage it.

Because I am closing soon on my new house, I don't have as much time as I'd like to meet equity investors the traditional way (meet ups, networking, etc.) and am looking for something fairly quickly. Are there any crowdsourcing or other online opportunity that folks have found effective for something like this? Most of the sites I've found seem to be more targeted towards investors, and not the person bringing the deal opportunity. Or any other tips for a first time fundraiser looking to meet equity investors with this specific criteria?

Thanks!

Alex

Thanks @Dallon Schultz -- perhaps I could open my search to 5+ units as well, and find a broader (different) market, that might have better opportunities?

I’m also interested in TX market, but specifically looking for 2-4 unit MF. Is there a market in TX that’s better for this asset class?

Specifically, seems like there isn't a lot of that type of product in the Dallas area, but maybe I'm just looking in the wrong places. Most of the posts above seem to be focused around SFH, are there other small multi family deals available better in certain markets?

@Austin G. I feel your pain... the SF home + Casita or ADU is very much not ideal because I'm always worried about:

1. Construction quality/permit issues
2. "Leasability" of that back unit
3. Exit strategy when it comes time to sell
4. Conforming/non-conforming
5. Etc...

Hi BP Community

I'm looking for access to off-market deals in the Phoenix area...

In general, I'm primarily looking for 2-4 unit multifamily properties in the Mesa/Tempe/Encanto Village/Camelback East Village/Northeast Central Phoenix areas, but I'm open to other multifamily opportunities if they make sense.

I've spent several months tracking the MLS, and either (1) a decent deal pops up and is picked up immediately above what I would call a "reasonable" or "market" price; or (2) there are some crappy deals that have been sitting on there for months.

I know there must be something better out there, and that's what I'm looking for... thanks in advance for your help!

Thanks!

Alex