@Arturo Borges Good question!
For me this is a question about scale. Can I grow my business faster by myself or with partners? Having good partners is critical to my success.
If the question is about executing one deal, I think there are some considerations to keep in mind when taking this approach.
Depends of the size of the deal (# of units) and the loan amount.
Being able to raise the entire equity required for a down payment and capital improvements is a good thing!
Things to consider:
- What expectations do your investors have of you to bring your own capital to the deal. Most investors want you to have skin in the game.
- Fannie Mae (5 or more units) would want the borrower to have a good track record, good credit and a few years of history operating apartments.
- The key principal (general partner, managing partner, any person or entity with a 50% or greater interest) to have liquidity of 6 months of debt service
There are lots of programs and lenders whose requirements vary greatly but you should consider that some level of experience + net worth is typically required for financing a multifamily deal. (That's not to say that it can't be done without one, the other or both - I bet there are quite a few testimonials out there proving otherwise.)
The upside to doing deals by yourself is that you get to keep all of the upside as agreed upon with your investors and control the investment decisions.
I believe multifamily investing to be a team sport best done with a partner or partners. To be successful you need to be really good at sourcing deals, raising equity & managing the asset.
