Equity Sharing Agreement/ Fractured Condo Deal
The deal is for 41 residential condos in Florida. The units are divided between 3 complexes in the West Palm Beach area.
Contract price is $1,995,000
NOI 240K
98% occupancy ( 1 vacant unit).
I put the deal together and submitted it to my HML, and he will lend a maximum of $900K at 13% interest only and about 10 points.
The seller is willing to hold a second, but after the bridge loan and the sellers terms on the second, the deal is no longer attractive from a cash flow stand point. (thats my thought).
The seller is willing to finance the deal with approx 20% down (approx 500K). This is where I need a partner/investor.
I need the partner to bring the cash down payment, in exchange for 50% of the equity in 5 years. The property will be placed in an LLC with the investors interests secured by the property/stock or both. The investor would also recieve a % of the monthly net profit.
I have available a mini executive summary, and a current income statement.
I will answer the most obvious question....... My mid fico score is not high enough to obtain conventional financing for this deal, as such I would not be able to immediately refinance as well (need for at least 5 years on the aggreement).
Please ladies and gents.....I have been working on this deal and other scenarios for some time now and I am VERY familiar with what I CANNOT DO, what I need here is how I CAN get the deal done.
The HML that I am working with has already run several scenarios with me, and he has said that he will keep doing so until I bring him a deal that works.....i trust his judgement. However if the deal can get done without hard money, then that great too.
And by all means, educate me I can never have enough education. Thanks and I look forward to your input.
How much up front money will YOU have in the deal?
[addsig]
I have the needed fee to pay for the appraisal.[ Edited by jmoorelpn on Date 12/25/2009 ]
Yes I am optimistic, I dont expect something for nothing.
An investor interested in comming to the table with the 20% down will of course get the lions share of the equity.
The HML that I am working with wants to see 10% down.
I expext to negotiate a deal that benefits all involved, being rigid and inflexible only guarantees that nobody will make money on the deal.
If you are interested, let me know, if not, thank you.