All Forum Posts by: Daniel Gorman

Thank you both for your comments.

@Ben Leybovich.  Thanks for your reply...very valid points, but let's just assume that maybe the investor wants to achieve a good cash on cash return for a period of time, but does not want to remain for a very long term.  My strategy is very long term...with the idea of creating enough passive income after a period of time to live comfortably in retirement...with the idea of paying off the mortgage sooner rather than later.  The investor may want to make a good return but not be in it for the long term.  

I am really looking for a creative way to bring the investor in, pay a good return, but have an out for both parties at some point that is mutually beneficial.  This is a buy and hold strategy.

Do you have any suggestions?

Thanks again

@Jason Dillard. Would you possibly have a suggestion of the structure of a buy out option?  I know they can vary greatly as with anything, but just trying to get an idea of how.  Thanks so much

I have studied many types of Equity structures in a syndication scenario with various types of preferred returns, equity hurdles, and more, however I have not been able to find anything about how a sponsor can buyout the equity limited partner in a long term hold scenario. Typically I have seen an exit strategy as a sale at the end of a hold period between 5-10 years, but I am interested in holding for very long terms so am trying to figure out how I can buy out the LP's who invest upfront while providing them a fair rate of return on their investment with me.  I have used straight debt from hard money loans to purchase small apartment buildings, but I am looking for another scenario as some of those investors have asked to be equity partners, but I would like the option of buying them out at some point.  Any ideas of how to structure a deal like this would be very helpful.

Thanks