I’m asking because I have this deal and seeking a money partner. I actually had a partner on this but as we’ve been progressing on the deal he got diagnosed with a life threatening illness and had to step away. Here are the details:
Currently there is a duplex on site we are purchasing for $525k, which is at market value or slightly(25k) below.
Need: $200k before closing for down payment, closing costs, and upcoming expenses for survey, architecture, and engineering. 200k additional once project is approved(6-12 months) for construction loan and carrying costs.
Return: 40% equity share in finished project that looks to have a total spread of $900k+ at 5.5 cap. At this point it looks like upon stabilization after construction we can refinance out most, if not all, capital. Partner keeps 40% share of an asset that has a little cashflow at first, but will also still have $300k+ of equity in the deal. (This is only accessed if sold or refinanced later.)
It sits on a large .36 Acre lot in Boise that is zoned Mixed Use, which allows for unlimited density, basically the limitation on density is meeting parking requirements.
We have a site plan put together that has been through 3 rounds of due diligence with the city and we are highly confident a very similar version will ultimately be approved. The site plan adds a 12 unit apartment complex to the site, and possibly another small 800-900 sf ADU. (Based on the 3rd round we need to adjust parking so not 100% sure on the ADU, but the apartment looks great). This would be 14 units without the ADU and 15 with it. I'm attaching the most recent site plan with ADU, still need to go through and make some tweeks based on most recent meeting.
The plan:
Buying duplex with 25% down. Rents will cover mortgage.
Approval for additional building(s) will likely take 6 months or less(Boise streamlined approvals last year and this is now a P&Z staff level review.
We then have to get engineering and plans approved which likely will take another 3-6 months.
Horizontal and Vertical on the site can happen at the same time, shaving 12 months off a normal development timeline.
Construction of apartment to take 12 months.
Stabilize upon certificate of occupancy and refinance out partner capital.
2 BIG reasons this is such a great deal:
1. We were brought this deal off-market and sellers didn’t know how the lot could be fully utilized, and don’t really care, they want out, and we are getting the extra land piece for FREE.
2. I’m a developer and builder and am developing and building this at cost as I am also a partial owner.
The Challenge for you as a money partner coming in:
Our previous partner left us in a very precarious inopportune time. We are scheduled to close on 12/20 and need to have an expedited process for everything from our new money partner. We need someone that can recognize this for the deal it is and move quickly.
If you have ability and interest please send me a message and I’m happy to hop on a zoom and cover further details in depth.
