All Forum Posts by: Brice Hall

thanks @Amit M., this is certainly an option. Any suggestions in terms of where you'd suggest finding such a loan, and what LTV would be required, along with the typical recourse?

While I agree, and try to limit partners whenever possible, we would also like to mitigate risk by working with capital partners. 

Thanks for the input @Omar Khan! In general, i'm also hoping to understand the current yield investors are earning / expecting to earn through such deals, and for different scenarios. 

Whether the investors come on as capital partners of the real estate entity and/or the operating entity for this particular location. Or if the investors are simply providing some form of bridge loan. 

While an attorney and accountant who has experience overseeing such deals will have some comps, it's also helpful to get a preliminary understanding, so we can start putting together projections. Thanks agin!

@Ronald Rohdeyes, great point, and we are certainly doing this :) For clarity, this is more of a how have you done it/what has worked well for you type of dialogue, where i'm hoping to gain more general knowledge, that i can use to add to the discussion. In addition, some people may have particular attorney's/cpa's they would recommend for such a deal, I'd love to have referrals. Thanks for posting!

Good day everyone! How would you consider structuring this deal?

The narrative...

We currently have a successfully operating retail based business. Recently, rather than continue to lease properties we operate our businesses out of, we are looking to purchase the real estate to add value and build equity. The first couple deals we've completed were rather straightforward, because we (the operating business) personally made the investment, and used more traditional bank commercial lending/mortgage. We've just recently identified a new location we'd like to expand into, and the current owner is willing to sell the real estate, for $8.5 million.

Because we are currently tied up in other deals, and have to close on this deal rather fast, we are looking for outside investors.

With that being said, our plan would be to purchase the real estate, and make approximately $4 million dollars in capital improvements and expansion. This should easily increase the value of the real estate to upwards of $15 million. We then want to operate our own business out of the space, so could essentially complete a lease agreement with ourselves+investors who would now be the landlord.

A few additional notes:

*We do have capital and could contribute a portion of the investment into the real estate, if this would be necessary

*We personally own a development.construction company, so would be completing the capital improvements ourselves

While there are a handful of ways to structure this, how would you personally tackle it, and tends to be the best way to approach this type of deal?

Thanks!

@Mike Meyer have any luck? seems most of sw is pretty toppy, with minimal returns ~6 caps. May be better off paying taxes :) or investing in municipal bonds to reduce. If looking to increase risk and achieve higher returns, perhaps index funds where zero work is required!

i really don't understand, I offered to pay anyone who can show long term investment succes and there were no takers. 

Blah blah blah

@Steve Vaughanyour welcome for generating the convo 

@Jim C.good honest answer thanks