All Forum Posts by: Tom R.

THANK YOU - to everyone who has taken the time to read and respond to my question. 

I really appreciate all the comments, whether negative, critical, positive or indifferent I am grateful that there is such an insightful group here on BP.

I've gathered some great info from this thread and am positive I can put together some numbers that make sense for both of us to knock this deal down.

Thanks again!

Hi @James Masotti - thanks for the input. I'll work that idea of the sliding equity into my financials and see how those numbers roll out.

Hi @Jay Hinrichs - I see you're very active on BP, so I appreciate you chiming in.

However, in your statement you make very many incorrect assumptions and broad stroke generalizations as they apply to my experience, financial status and overall understanding of the people I am working with.

While I do appreciate the dialog with you I am not looking to debate incorrect assumptions and generalizations that may not apply to what I may or may not have & the sophistication of the folks I am engaging with. 

I am however, looking for insight into this specific deal & insight into how one may restructure some creative %, splits, etc.

Even with the above said I do appreciate the 'devils advocate' slant you took. 

Thanks @Mike Wood - good points and you are correct the strategy with this one is a Buy, rehab, rent, refi - hold...

I have a few ideas thinking through this and will post an idea for you all to 'pock holes in'.

Hello @Daria B. thanks for the post.

Yes, you are correct. IF, however we maintain the 50/50 across the board deal.

Hi @Kevin Bonner -  thanks for the insight. I have been noodling around a way to offset my time via cash flow variance. 

But even with that strategy we'll only be able to do this one deal since I don't have the cash flow after my 50% into this deal for other future deals. 

Since the "PI" go forward strategy with me is 50/50 on this an future deals.

Hi @Michael Le - Thanks for the reply. I can see your point and it is a concern of mine. 

But, as you know there are so many 'nuances' to a deal/relationship that I cannot express via a forum post.

That's why I am really working to see if I can figure out a way to make this work.

But a 'bad deal' is a bad deal and sometimes you do have to walk.

Hi @Brock Y. thanks for the insight.

That is a concern of mine, the move forward strategy with him. 

I do not have the liquid assets or capital he has to front 50% outside of this deal. So yes, I am very concerned that is his how he wants all 'future deals, 50/50'

So what I am hoping to do now, with the help of you all smart folks, is craft a deal that I can present that will take away this 50/50 mindset so it is not his expectation for this & 'all future' deals.

If I ("we BP folks.:) can figure out an alternative deal structure then I'm sure we can close this deal and work on others.

If I cannot figure out a creative alternative to his current 50/50 offer then yes I will have to walk.

OK, here is the situation I'd like some creative financing / deal structure ideas please.

I have a deal/property & I approached a private investor friend with:

I originally structured the deal to him as a 'debt' only investments:

• IE: Investor put in 100% and received 10% interest over 18 months. 
•   After 18 months I refinance, pay investor 100% of capital.
• I keep property and we 'lather, rinse, repeat' another property.

 I was planning on vetting property, managing rehab, managing property mgt, managing finances (payouts, etc) managing LLC (asset protection strategy), etc., etc., etc. :)

However!!!! He has a change of mind and now wants the following:

• 50/50 investment (he pays half, I pay half)
• 50/50 ownership
• 50/50 cash-on-cash rent pay outs.
• He wants NO management or ongoing responsibilities.
• IE - I do property vetting, mgt of rehab, mgt property, mgt finances, mgt llc, etc.

My question to all of you very smart & creative financial folks is this:

How can I structure this deal that make more sense for both of us. He is holding strong on him doing NOTHING other than provide 50% of the upfront cash while wanting 50% of the assets.

As a side note, he (my friend) is sitting on a huge pile of liquid assets to use towards "investing".
I know he is very nervous going into REI, but if we pull this off and he feels comfortable I know we can take down many more properties. So I really want to try and make this work for the upside of future deals.

Thank you so much for reading my post and I look forward to your replies.

P.S. Yes, the numbers are solid and the SF property will be +CashFlow, etc

@Tyler Jahnke thanks for sharing your journey, it's been really interesting and best of luck!