All Forum Posts by: Andy Nichols

@Account Closed Georgia 

@Account Closed the loan will be around $650k. 5% is the agreed upon rate. The net worth requirement is my concern. Looking for creative avenues to pursue around this or advice on banks that may have less requirements for the net worth box (credit unions, portfolio lenders, etc) 

I am touring a 20 unit apartment building this week that was just listed for sale. Decent asking price for a value add investment that is currently renting at 58% of market rates. Plan is to renovate unit by unit, shuffle tenants or find new, and have a 3 year hold.

I am a mid 20's recent college grad with a masters in real estate development, spent 2 years at CBRE, and now work for a commercial GC. I currently have no debt, but due to that am lacking assets/liquidity. I have a family member committing the down payment costs for an acquisition and construction loan. Operating agreement structure would be that I control all aspects of development, pay 5% on his money lent to me during 3 year hold and upon reversion, distribute 10% of proceeds back to him.

Is a bank going to loan on this set up? What requirements are they going to have? I was planning to collateralize the property due to lack of assets. Any other comments on this structure?

I am working towards a presentation to an investor that I have on board to commit capital to some small student housing opportunities in a smaller market. I have a commercial office/industrial background and am able to compile proforma's for each property no problem. We are looking at 5 properties that the numbers reveal they should be advantageous. 

2 properties are vacant complete rehabs, one is income producing with tenants in place, one is vacant needing no work, and the last is vacant with minimal work. 25 bedrooms between the 5 properties. 

My question is the equity payout structure. Do I set up SPE for each property with benchmarks for a waterfall structure?

What do those benchmarks look like? 
Do I set up a JV LLC?

One LLC for all properties? Tax implications?

The initial model we have in place at the moment is all procurement, construction, and property management fall under my responsibilities while the investor strictly provides capital and waits for a check in the mail. 

Thoughts?