A Multi-Family Investment Oppurtunity
This proposal is from a client that has a large portfolio of 15,000+ rental apartments in the Tri Borough Area and has been in the Multifamily Business for over 30 years as well as 5 Million SF of commercial space. Due to the clients extensive experience and knowledge they are presented with many interesting opportunities and seek capital joint venture from a strategic partner on each opportunity.
For clarity purposes the parties will be named as follows: Capital Investor and Client.
**All representations are provided for illustrative purposes only and have been compiled from sources deemed reliable. Though information is believed to be correct, it is presented subject to errors, omissions, changes and withdrawal without notice.
The Capital Investor would invest 30% of the purchase price in cash and the Client would secure financing.
The portfolio would be held in an LLC.
The Capital Investor would have a preferred rate of return until all of their Capital was returned in 4-5 years.
The Client would maintain and property manage the asset.
At the breakeven point of 4-5 years, the asset is refinanced and Capital Investor has 60% Ownership of the Investment and the Client the remainder.
The Asset will continue to be held and managed by the partners accuring value and income proportionately 60/40%
Exit Strategy: Investor receives all of their Investment back in approximately 4-5 years.
The Future Sale (if any) of the property or of the Investors Ownership % is not currently defined and would need to be defined before entering into the partnership.
EXAMPLE BELOW
Purchase Price: $100,000,000
Capital Investor: $30,000,000 CASH
Asset Gross Rent: $10,000,000
RE Taxes/Expenses/Vacancy: 55% of Gross Rent (Approx: $5,500,000) (Hard costs to run and operate)
Debt: $2,000,000 (3% of $70 million)
Remaining Income after Debt & Expense Service: $2,500,000 (100% of profit goes to the investor)
Capital Investor Return: Investment: $30,000,000
Year 1: $2,500,000 to investor 7-8%
Year 2: 11-12% back to investor
Year 3: 16-18%
Year 4: Refinance of asset and Capital Investor has 100% of Investment Returned and Owns 60% of Asset.
Loans are typically 5-7 years in length
Chris Fry is here to help you throughout the New York City home buying process. This team has a dynamic combination of unrivaled sales skills, many years of experience, and the ability to form lasting relationships with clients. It would be a privilege to work together in buying, selling, renting, or investing in properties both on- and off-market throughout New York City.