Expert: Terrence Cullen - 10/17/2008

Question
I just requested info on an investment property with 80 units. Seller says assumable funding at 6%. Do you think I will be able to raise the balance of the acquisition funds in this environment? How can I structure this with a potential investor, would like to offer investor a sweet deal so I do not have to use any of my money.

Thanks in advance for your help.

Ray Acevedo

Answer
Ray,
 Cash is king these days and whoever you bring in will have plenty of options for his money. The structure would depend on what percent risk your investor is taking. First off run the numbers and get an idea where this deal would appraise at and how much NOI is being generated.

Is there an upside?
What kind of market is it?
How much is the assumable debt?
What percentage of the total loan is it?

The market return on short term money is 15- 20% IRR. If you would like me to run the numbers send me the rent roll, the P & L year to date and last two years, plus market info and sales price.


Good Luck, TC