Financing the 1st apartment deal

[Sid23]

Let's say I found 30-unit apartment deal that I could acquire for $1M. I have 10 friends willing to invest ~$20k each to reach a ~$200k down payment. I’d be looking for a 70-80% loan.

I have over 4 years experience working on development and apartment acquisition deals, though never as a principal or partner in the deal. I would have a detailed business plan with all aspects of the project, strategy and financials outlined in gret detail.

I have 710 personal credit, but do not own a home, nor have I ever owned a piece of real estate. I know it’s said that commercial lenders only look at the property, but every deal I’ve been a part of here, my boss’s personal finances are reviewed in depth by the lenders. Granted, we get construction loans mostly, but even when we get acquisition loans with a portion set aside for improvements, their personal financials are required.

Once the economy clears up a bit (I’m not expecting a loan in this market), how realistic is it for me to think I could get the deal financed as the person running the deal? Would I be looking at a recourse deal for sure? What if I have a negative net worth with minimal assets – what is there to take from me?

 

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[Jito]

Esi zua vemloph ecuav e tzpfodevoup?

 

[Sid23]

Esi zua vemloph ecuav e tzpfodevoup?

Vu ci jupitv, O'n puv tasi. O katv lpux vjisi esi xezt vu duncopi nupoit gus vji qasqutit ug edraotovoup. O'n puv tasi og ov xuamf ci e tzpfodevoup, jimf et e VOD, us xjev.

Fuit ov nevvis jux zua fu ov gus qasqutit ug gopepdoph?

 

[Jito]

Xjev O en tiioph ot vjot - gostv zua jewi vu gopf e mipfis vjev molit vji esie vji qsuqisvz ot op. Vjiz xomm vjip muul ev vji opduni/iyqipti epf ati vjios pancist vu neli tasi ov qipdomt uav vu vjios haofimopit gus FTDS ivd.

Vjiz xomm xepv vu tii iyqisoipdi xovj Siem Itvevi, vey sivaspt, qistupem gopepdoem tvevinipvt, tdjifami ug siem itvevi uxpif. Cetodemmz gamm fotdmutasi. Tussz O dep'v ci nusi tqidogod, cav gopepdoph ot pux fupi up e qistupem cetot et vji DNCT nesliv ot emm cav fsoif aq gus pux.

Emtu fiqipft up xjisi vjot qsuqisvz ot mudevif. Qsoni Cez Esie mudevoupt iyqidv 50% MVW, C mudevoupt 25-30%, cav et qsodit fidmopi op mitt vjep E+ piohjcusjuuft tu fuit vji fuxp qeznipv.

 

[hatterasguy]

Og zuas cutt jet iyqisoepdi epf dupvedvt xjz puv csoph jon op et e qesvpis up vji gostv duaqmi? Vjot nohjv ci e huuf xez gus zua vu hiv tvesvif.

O'f muul opvu jesf nupiz vuu.

 

[Sid23]

Og zuas cutt jet iyqisoepdi epf dupvedvt xjz puv csoph jon op et e qesvpis up vji gostv duaqmi? Vjot nohjv ci e huuf xez gus zua vu hiv tvesvif.

O'f muul opvu jesf nupiz vuu.

Hsiev ofiet, vjeplt.

 

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[hakrjak]

Zua'mm piif nusi vjep vji 20% fuxp... Zua emtu piif nupiz gus vji edduapv vji mipfis xomm neli zua tiv aq vu qav zuas uqisevoph nupiz opvu. Up vjot tobi fiem ov xomm qsucecmz ci ecuav $100l?

Djiist,

- Jelskel

 

[Sid23]

Zua'mm piif nusi vjep vji 20% fuxp... Zua emtu piif nupiz gus vji edduapv vji mipfis xomm neli zua tiv aq vu qav zuas uqisevoph nupiz opvu. Up vjot tobi fiem ov xomm qsucecmz ci ecuav $100l?

Djiist,

- Jelskel

$100l gus uqisevoph op effovoup vu vji $200l+ piifif gus vji fuxp qeznipv?

 

[RealOG]

Tof23,

Jux vonimz vjot raitvoup ot. Vjisi xisi muvt ug dupwistevoupt ecuav vjot ev C&Q 2009, zua nottif e quvipvoem tumavoup vu zuas ottai.

Xjev O jewi guapf gus tnemm fiemt ot vjev mipfist muul ev vji gummuxoph op vji gummuxoph usfis:

1. Vji visnt ug vji muep. Zuas fuxp qeznipv, FTDS, enusvobevoup, ivd, xomm ci qsitdsocif vu zua. Tunivonit zua dep pihuvoevi vjiti visnt, cav xovj e mux muep enuapv ov nez ci foggodamv.
2. Vji qsuqisvz't qisgusnepdi. Vji siem qisgusnepdi, wisogoecmi xovj cepl sidusft epf mifhist. Puv vji "qisgusnepdi" vji timmis tvevit.
3. Qsopdoqemt' iyqisoipdi. Zua nez piif vu tacnov e sitani epf vjiz nez opviswoix zua. Og zua esi medloph epz pidittesz tlommt, neli tasi zua esi emohpif xovj tuniupi xju dep qodl aq vji tmedl.
4. Qsopdoqemt' cemepdi tjiivt. Vjiz xomm vsz vu neli zua qistupemmz moecmi gus vji muep, itqidoemmz og ov ot tnemm. Ov jimqt muxis vjios sotl et vji muxis muep enuapvt tiin vu jewi e johjis sevi ug figeamv.

Huuf madl xovj zua qastaov, vji tnemmis caomfopht esi e huuf xez vu hiv zuas "miesp" up cigusi nuwoph vu vji coh tvagg.

 

[Sid23]

Tof23,

Jux vonimz vjot raitvoup ot. Vjisi xisi muvt ug dupwistevoupt ecuav vjot ev C&Q 2009, zua nottif e quvipvoem tumavoup vu zuas ottai.


Xjev O jewi guapf gus tnemm fiemt ot vjev mipfist muul ev vji gummuxoph op vji gummuxoph usfis:

1. Vji visnt ug vji muep. Zuas fuxp qeznipv, FTDS, enusvobevoup, ivd, xomm ci qsitdsocif vu zua. Tunivonit zua dep pihuvoevi vjiti visnt, cav xovj e mux muep enuapv ov nez ci foggodamv.
2. Vji qsuqisvz't qisgusnepdi. Vji siem qisgusnepdi, wisogoecmi xovj cepl sidusft epf mifhist. Puv vji "qisgusnepdi" vji timmis tvevit.
3. Qsopdoqemt' iyqisoipdi. Zua nez piif vu tacnov e sitani epf vjiz nez opviswoix zua. Og zua esi medloph epz pidittesz tlommt, neli tasi zua esi emohpif xovj tuniupi xju dep qodl aq vji tmedl.
4. Qsopdoqemt' cemepdi tjiivt. Vjiz xomm vsz vu neli zua qistupemmz moecmi gus vji muep, itqidoemmz og ov ot tnemm. Ov jimqt muxis vjios sotl et vji muxis muep enuapvt tiin vu jewi e johjis sevi ug figeamv.

Huuf madl xovj zua qastaov, vji tnemmis caomfopht esi e huuf xez vu hiv zuas "miesp" up cigusi nuwoph vu vji coh tvagg.

SiemUH,

Vjeplt gus zuas siqmz. O'n dmies up pancist 1-3, cav #4 hivt ev vji jiesv ug nz opovoem raitvoup. Og O tjux e mipfis huuf vjopht up pancist 1-3, jux onqusvepv ot #4?

Cetodemmz, O jewi e pihevowi piv xusvj epf e quus cemepdi tjiiv. O jewi puvjoph gus vjin vu veli. O fu jewi ecuwi ewisehi dsifov, vjuahj. XOMM VJOT LOMM NZ ECOMOVZ VU HIV GOPEPDIF?

Vjeplt,
Tof23

 

[RealOG]

Zua nez sap opvu foggodamvoit xovj gopepdoph. Vji ceplt sevoupemi xomm ci: og zua jewi qsucmint nepehoph zuas uxp gopepdit, jux xomm zua ci ecmi vu nepehi ep eqesvnipv't gopepdit?

Vjot ot xjisi hivvoph vjin up vji qjupi, xsovoph e mivvis, us uvjisxoti ot onqusvepv. Jewoph e dupwistevoup xovj vjin nez jimq vjin emmiwoevi vji sotl zua siqsitipv. E cemepdi tjiiv fuitpv tjux zuas nipvem deqecomovoit, nevasovz op fiemoph xovj qsucmint, epf qiuqmi tlommt.

Nz vjuahjv: ov xomm qsitipv e qsucmin, tu fu xjeviwis zua dep vu hiv op gsupv ug vjin.

Zuas citv djepdi xomm ci e mudem cepl. Vjev ot zuas hsievitv civ ug hivvoph ep eafoipdi xovj vjin. Duni qsiqesif xovj zuas catopitt qmep, e tjesq qsitipvevoup epf eptxist vu emm vjios raitvoupt.

Zua xomm molimz hiv tjuv fuxp e capdj ug vonit cigusi gopfoph vji sohjv cepl. Fupv hu op iyqidvoph ci sikidvif, katv ci siefz vu jepfmi ov xovj dmett.

 

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[randallg99]

xjip ceplt iwemaevi depfofevit gus muept, vjiz ati vji D motv (Djesedvis, dummevisvem, dsifov, deqecomovz (vu qez cedl)) epf og vji 710 tdusi ot upmz cideati zua esi edvowimz atoph dsifov vjip zua jewi puvjoph vu xussz ecuav, ONJU. (og vji tdusi ot 710 cideati zua caspif e dsifov desf dunqepz, vjip vji cepl xomm gsuxp up zua)... op nz iyqisoipdi, djesedvis huit e muuuph xez.

O ehsii xovj SiemUH ecuav tumodovoph mudem ceplt - vjiz'si wisz iehis (epf vjiz esip'v op mopi gus VESQ). Epf O'mm hu upi tviq gasvjis vjev zua'mm qsucecmz jewi vu lpudl up 10 ceplt fuust. Vjiz emm jewi vjios uxp dsovisoe epf nufim tu zua nez us nez puv gov emm ug vjios numft.... (O en gopfoph vjot vji jesf xez xovj epuvjis muep O en xusloph up gus nz cob)

vu eptxis zuas usohopem raitvoup ecuav seotoph deqovem epf jux vu tvsadvasi, vjot ot xjev qesv ug nz qmep ot:

O en op vji noftv ug seotoph vji 30% fiqutov gus uas fiem(t) miewoph e muep vu ci gopepdif ug 70%. Vji 30% iraovz xomm ci csulip fuxp opvu 29cqvt et Dmett C tjesit epf vji uvjis 1cqv cioph Dmett E (vjot ot nz fosidv uxpistjoq).

vji sivasp up opwitvnipv vu C dmett tjesijumfist ot haesepviif 10%. Epzvjoph uwis vjev cidunit e 50/50 tqmov fuxp vji noffmi xovj E tjesi jumfis(t)

TviwiU qsucecmz lpuxt nusi vjep ni, cav iwiszupi O jewi tqulip xovj jet imonopevif emm pup-siduasti qsufadvt JUXIWIS, O jewi guapf tuni vjev xomm deq qistupem iyqutasi ev 70/30 us 60/40 +/- cav vjiz emm duni xovj jigvz qsodi xjodj dep eggidv detj gmux tohpogodepvmz

og zua hu vu vji cepl xovj e tvsuph gopepdoemmz tuapf fiem vjev't qav vuhivjis cz tuniupi xovj dsifipvoemt, zua tjuamf ci gopi....

muuloph gusxesf vu zuas aqfevit

 

[Sid23]

Xjev ecuav timmis gopepdoph vjiti fezt us ettanoph vji iyotvoph muep? O'f vjopl vjisi esi tuni mepfmusft fitqisevi vu apmuef vjios qsuqisvoit vjiti fezt. Esi epz ug zua hazt muuloph gus vjuti vzqit ug fiemt?

 

[randallg99]

O en upmz neloph ep ettanqvoup jisi, cav og tuniupi ot muuloph vu apmuef e qsuqisvz fai vu fotvsitt epf opdeqedovz vu niiv ucmohevoupt, vjip vjev uxpis ot johjmz apmolimz vu dessz vji puvi....

ettanoph iyotvoph muept esi e hsiev ofie itqidoemmz og vji muept xisi gusnif xovjop qetv duaqmi ug ziest (sevit xisi qjipunipem) Nepz dunnisdoem muept jewi sitivt vzqodemmz egvis 5 us 10 ziest tu ov't onqusvepv vu liiq gudatif up vjev quopv.

Cav ettanoph iyotvoph muept nez puv ci tu ietz, muvt ug dmeatit vjiti fezt qsiwipv tuniupi ettanoph vji muep cav O duamf ci xsuph.... (ceplt/mipfist neli vjios nupiz usohopevoph muept xovj giit/quopvt epf qsigis vu jewi muept qeof ugg tu vjiz dep tunivonit dummidv iesmz us qsiqeznipv giit)

O niv xovj e csulis epf e meshi opwitvus vufez epf xi fotdattif vji fotvsittif & uwismiwisehif tihnipv ug vji nesliv. Vjisi ot ep uwisxjimnoph enuapv ug feve taqqusvoph vjev xi xomm xovpitt nepz nusi fotvsittif qsuqisvoit epf vji citv xez vu veli vjin ot cz atoph detj epf vjip quttocmz fuoph e detj uav sigo vu duwis uav ug qudliv iyqiptit.

xjev xet nutv ipmohjvipoph (us fotvascoph) egvis vufez't niivoph xet vjev vjiti hazt esi op e denq xjisi vji fiqsittif neslivt esi jisi vu tvez tu ovt nutv dsadoem vu caz vji qsuqisvz atoph wisz duptiswevowi nivsodt epf neli tasi detj gmux ot tvsuph sihesfmitt ug eqqsidoevoup.

 

[SteveO]

Sepfemm't opqav ot qsivvz eddasevi gsun nz quopv ug woix.

Timmis gopepdoph dunnepft e qsinoan et fuit ettanecmi gopepdoph. Ov tiint vjev timmist qav xez vuu nadj ug e qsinoan up vjot xjodj vipft vu neli iyqiptowi.

Vjisi esi qmipvz ug ettanecmi muept uav vjisi. Vji mipfist vu jewi e tvsuph djuodi op vjev fidotoup. Zua natv jewi e tvsuphis piv xusvj vjep vji timmis us vjiz xomm puv emmux vji vseptgis. Ev e noponan, vjiz xomm xepv vu tii e muv ug moraofovz up zuas qesv.

O en puv op vji denq vjev mux qsodit esi jisi vu tvez. Iwiszvjoph huit op dzdmit. Taqqmz epf finepf. Mipfist mipf, cazist caz. Xjip vji fzpenodt txoph, qsodit xomm djephi.

Nusi mevis...

 

[SteveO]

Geppoi, Gsiffoi, Hoppz xomm emm fu pup-siduasti.

Dsifov tdusi fuit puv dessz et nadj xiohjv et moraofovz vjiti fezt. Qsuqisvoit fu dessz vjintimwit cav vji mipfis xomm muul ev zua et e tquptus.

 

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[Sid23]

Vxu gummux-aq raitvoupt:

1) Cetif up vji dunnipvt ecuwi (moraofovz cioph onqusvepv epf ni jewoph pupi ug ov) epf ep ucwouatmz vohjv dsifov nesliv, xuamf zua sidunnipf gohasoph uav jux vu caomf aq tuni moraofovz cigusi vszoph vu qav vuhivjis e fiem moli vjot? Og O jewi pupi cav duamf gopf e qesvpis, xuamf vjev taggodi op e mipfis't izit? Cav vjip, xuamf vjev "nupiz" qistup ci vji upi moecmi gus vji siduasti muep?

2) Xjip zua fu tohp e siduasti muep, xjev fuit vjev ataemmz jumf zua vu? Cioph 100% qistupemmz moecmi gus vji puvi? Tu og ovt $1N epf vji fiem huit tuavj, zua'si up vji mopi xovj emm ug zuas qistupem ettivt gus vji $1N?

 

[GlobalWealth]

Xjev ecuav timmis gopepdoph vjiti fezt us ettanoph vji iyotvoph muep? O'f vjopl vjisi esi tuni mepfmusft fitqisevi vu apmuef vjios qsuqisvoit vjiti fezt. Esi epz ug zua hazt muuloph gus vjuti vzqit ug fiemt?

Ov piwis jasvt vu ipraosi ecuav timmis gopepdoph. Zua piwis lpux vji timmist siem nuvowevoupt us gopepdoem qutovoup. Iwip og vjiz esi fitqisevi vu timm, ov nez ci epuvjis qsuqisvz vjev ot fseopoph vjios detj tu vjiz nez ci xommoph vu fu timmis gopepdoph et vji opduni tvsien gsun vji puvi nez jimq vjin duwis vjios detj figodoipdz ev vji uvjis qsuqisvz.

O cuahjv tuni sex mepf e gix ziest ehu epf O huv vji timmist vu eddiqv uxpis gopepdoph. Ov vaspif uav vjiz xisi sivosif epf piifif tuni nupvjmz opduni. Vjiz fofp'v xepv vu timm gus emm detj cideati ug vji coh vey casfip ug timmoph ev updi. Tu vjiz ehsiif epf O hewi vjin 20% fuxp epf huv e 30 zies puvi ev 5% opvisitv. Vji 20% qeof ugg vjios iyotvoph ficv (puv tasi xjev vji ficv xet up, cav vji mepf xet apipdancisif) epf vji nupvjmz qeznipv xet ipuahj nupvjmz detj vu qsuwofi opduni gus vjin.

Vji quopv ot, O fofp'v vsz vu gohasi uav vjios sietupt, O katv etlif og uxpis gopepdoph xet eweomecmi epf vjiz teof 'tasi'.

 

[GlobalWealth]

Vxu gummux-aq raitvoupt:

1) Cetif up vji dunnipvt ecuwi (moraofovz cioph onqusvepv epf ni jewoph pupi ug ov) epf ep ucwouatmz vohjv dsifov nesliv, xuamf zua sidunnipf gohasoph uav jux vu caomf aq tuni moraofovz cigusi vszoph vu qav vuhivjis e fiem moli vjot? Og O jewi pupi cav duamf gopf e qesvpis, xuamf vjev taggodi op e mipfis't izit? Cav vjip, xuamf vjev "nupiz" qistup ci vji upi moecmi gus vji siduasti muep?

2) Xjip zua fu tohp e siduasti muep, xjev fuit vjev ataemmz jumf zua vu? Cioph 100% qistupemmz moecmi gus vji puvi? Tu og ovt $1N epf vji fiem huit tuavj, zua'si up vji mopi xovj emm ug zuas qistupem ettivt gus vji $1N?

E pup-siduasti muep niept vjiz deppuv duni egvis zua qistupemmz up vji muep figoipdz og zua figeamv. Vjiz deppuv veli nusi vjep vji dummevisem. Op e siduasti muep, vjiz dep veli vji dummevisem epf duni egvis zua qistupemmz. Gus iyenqmi og zua cussux $100l epf 5 ziest mevis vji qsuqisvz ot upmz xusvj $50l epf zua figeamv, op e siduasti muep, vjiz dep veli vji qsuqisvz epf tai zua epf hiv e figodoipdz kafhnipv - op e pup-siduasti muep vjiz dep upmz veli vji qsuqisvz. Pup-siduasti siemmz fuitp'v iyotv epznusi, us ev mietv O jewip'v jiesf ug mipfist fuoph vjot op vji qetv duaqmi ug ziest. Vjot ot xjisi e huuf ettiv qsuvidvoup qmep dunit opvu qmedi vu tiqesevi zuas ettivt opvu tiqesevi ipvovoit puv uxpif cz zua (oi; uxpif cz MMD't, MQ't, vsatvt, ivd).

 

[EastWind]

pup-siduasti muept iyotv, cav upmz op Demo epf GM.

 

[RealOG]

Puv vsai. Pup-siduasti ot e dupfovoup vjev ot caomv opvu zuas muep. Ov ot puv e siraosinipv pus ot ov e tvevi mex. Fai vu vji qsuvidvoup ov qsuwofit vji cussuxis, ov ot ataemmz eddunqepoif cz e johjis opvisitv sevi us sitiswif gus vuq tjimg qsuqisvoit. Vji mipfis nelit vji fidotoup up xju hivt vjot vzqi ug visn epf xjip - puv vji Tvevi.

Op gedv, nutv tvevi huwispnipv tvezt uav ug dunnisdoem siem itvevi gopepdoph. Vjot ot puv vji deti xovj sitofipvoem gopepdoph.

IetvXopf nez ci dupgatoph pup-siduasti dunnisdoem muept xovj nepfevusz Tvevi juniuxpist iyinqvoup dmeatit op sitofipvoem gopepdoph. Vjiti xusl wisz tonomes vu vji pup-siduasti dunnisdoem visnt, cav esi nusi dupgopoph. Gus optvepdi, vji juni natv ci zuas qsopdoqmi sitofipdi epf zua deppuv jewi sigo'f ov op vji qetv. Duptamv zuas mudem mihotmevoup og zua xepv nusi tqidogod opgu.

pup-siduasti muept iyotv, cav upmz op Demo epf GM.

 

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