Howdy ya’ll!!! I have been thinking about the best way to market to potential cash partners. If I have buildings that would easily support 100% financing, but lenders don’t do 100% financing, this necessitates partners, right? Assuming the answer is yes and I find potential cash partners to pick up the 10% - 20% down payment, how do I make it a win-win deal? I don’t see them becoming too excited over putting 10% in cash and receiving 10% of the cash flows. I DO see them getting excited about putting 10% in cash and receiving 50% of the cash flows. Could someone with some real world experience with this give me a scenario for how to structure one of these partnerships? Also, when calculating ROI from the cash partner’s perspective, do I count the entire period of ownership up to sale, or like some industries, do I use a standard time frame, i.e. three years? Finally, if corporate entitties are not eligible for 1031 exchanges, is it possible to dissolve the entity right before closing and allow each partner to do a 1031 exchange with their individual proceeds? Thanks ya’ll and God bless!!!
Howdy Mike:
I too feel your pain with regard to finding investors. I have almost always had deals and no money or money and no deals. I have just now started to get deals to click. It takes time and determination and a burning desire and a knowingness that it can be done. Networking here on this forum has been great for me. I think even more important for me has been the giving of my time helping others. I did not know it at the time that I started but it too is a form of networking and advertising that I did not even know existed. The more I help others the more the more I get in return. What a wonderful concept that has been taught for centuries that I never understood until now.
As for your NOI question just keep it simple. I have seen numbers show how losing money on a time shake can make you money over 30 years with appreciation and tax deductions while writing a check every month for the payments that you can not afford to get that golden egg at the end.
Where did you hear that Corporations can not do 1031 exchanges? WRONG. Always go to the source for information and make sure you have the facts correct. Search 1031 Exchange companies on Google for instance and communicate with some of them.
If you prefer to pass the tax consequences to the individual tax payers you can do that too with LLCs and partnerships and just a plain DBA company.
In the last several months I have been successful getting funds at 36% with my small line in my signature below. I perhaps am paying too much interest. Most of the responders have asked if I was for real or what is the scam. It is expensive and probably even usury but it is cheaper for me than partners and with super deals it is still affordable. When I build a name for myself I will be able to get cheaper equity funding and hard money loans will be easier to get but I need to pay the freight for the risk taken by the investors. It is hard to repossess someone else’s mistake and finish it.
Good luck on finding the partners you are searching.
Ted, notice the change… I ran the numbers and you are right, it will support this scenario. Thanks a mill!!!
As for helping others, you are absolutely right!!! I’ve heard it said this way: You can never outgive God.
As for the 1031 exchange, I don’t even recall where I heard that. Go figure…
I’m joining Austin’s RENC. Are you a member?