I have a great deal. need help!!!

I have an apartment community with over 400 actually closer to 500 units at a purchase of 2 million aprox $3,500 a unit with a 50% occupancy and about 75 units down with a possible performa of 2.8million per year. current performa 1.3million and the buildings are structurally sound after all is said and done the units will net 1million a year the rehab to update the entire complex will be aprox 2-2.5 million the current investor I have is dragging his feet due to it being in a c- to d+ area the complex still has an upside of aprox 15K per unit. to put it in laymans terms an investment 4 to 4.5 million an upside of 7million with a 1 to 1.2 million a year return.

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Are you an investor or a real estate agent?


I’m an investor, who is lookin for a possible equity investor who might want to work with me I’ll find the deals get them performing and either flip or share in a long term hold . I have been finding deals in the past and am planning on starting to get serious and don’t want to waste my time with deadbeat investors . I’ll turn over every rock until I find some and would like either a equity share or a serious finders fee.

Where have you looked thus far?

For deals I’ve worked thru some commercial listing agents and for investors I’ve only had a few given to me by referral . I feel if I work hard I know I’ll find the deals I would like some more investors interested in working with me on these deals


Showcase 260 the reason fellow investors get involved in projects as partners is because the other person brings something to the table, either has experience and a track record managing and turning around large properties or has a large block of cash making it beneficial to partner with another person!

If you use the fifty / fifty rule for apartment properties and re-adjust income for a 10% vacancy factor, assuming your $2.8m proforma is correct re-adjusts income to $2,520,000 per year or $210,000 per month! Under the 50 / 50 rule this allows $105,000 for management, expenses and reserves and $105,000 for debt service and positive cash flow!

The debt service amount of $105,000 will provide a 10% profit margin on a debt service payment of $93,875 per month which supports a value of $17,000,000 and a cap rate of 13.5, now actual numbers will vary on the assumption that once rehab / remodel is completed market rent rates will improve effectively lowering the cap rate!

If your able to buy this property for $3,500 a unit it tells me this property needs a major rehab badly to restore the $35k to $40k per unit value, to do this the property would really require roughly $23k per unit or a $11.5m dollar restoration. The fact that current occupancy is 50% tells me this property is becoming uninhabitable!

With a major rehab / remodel this property would effectively become a class B property and with proper management and reserves would probable insure another 30 years of residential life!

It is no wonder your investors are dragging thier feet as your numbers don’t make sense and nobody wants to be a slum landlord, your rehab numbers only provide $5k per unit in repairs which has to be alotted to the interior and exterior and does not provide for changing the overall complex to effectively attract new tenants!


Mr investor I thank you for you uneducated assumption about a property you have never seen. I have been a home builder and house flipper for over 10 years and I know what it costs to fix the property I described above, the buildings are solid with a brick exterior the roofs are new some units are down aprox 75 which will cost 12k each to fix while the other unoccupied units will require 1k to 3k each along with other improvements like 300k to pave parking lot. The reason the units have a low vacancy is that the past owner lost the complex because overleveraging and bad management. I don’t need someone to tell me what the property’s worth I’m looking for someone who is interested in funding this awesome deal!!!

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You might wish to read the Forum rules…and if it is such a darn awesome deal, why are you looking for financing on a Forum. You would think after 10 years you would have some connections…

I’m sorry forgive me I thought I was on a location where their might be people actually doing real-estate transactions and not just talking about them.

isn’t it funny the people that need someone else’s money to put a deal together are always the ones that know everything,you would think with that much experience any bank would loan you the money,why won’t they?

I'm sorry forgive me I thought I was on a location where their might be people actually doing real-estate transactions and not just talking about them

Hope your business acumen is better tham your assumption skills.

You know the sad part of this whole conversation is I’m not as green as my quantity of posts might suggest and I have currently 4 private investors who have invested with me multiple times, and the reason they were dragging thier feet on this deal isn’t because they didn’t want to do it , it was because they didnt want to spread themselves to thin. And they were very happy with the returns they were making with the deals we were already doing averaging a 25% cap rate. By purchasing distressed properties with around 50% vacancy, and by Capitol improvements and strong management got the property performing. It seems to me everyone is trying to tell me what I don’t know, instead of believing that I actually have a good deal, when all I was looking to do was see if someone might actually have interest enough to actually at least look at what I was offering and after they saw what I had then they might actually like what they saw, instead of criticizing me without having a clue of the actual deal. And by the way I was in competition with 5 other investors , but I had first shot but now have lost that advantage, and another investor has his offer already in place. The thing everyone assumed was that I didn’t know what I was talking about ,when in all reality I was looking for someone who might want to share a great opportunity with me . I will not come here again when I find another great deal. I guess my mistake was I thought there were a lot of people on here who might be lookin for opportunity kinda like my reiclub.

You’re not understanding the point of this website. This is educational. People aren’t allowed to come on here and peddle their junk programs or advertise their deals. The owner of this board didn’t want it to turn into a feeding frenzy with everyone posting about their “deals.” So you could have come on here and asked, “how do I find investors for an apartment complex deal needing rehab?” rather than “hey I’ve got this awesome deal.” That’s all Mark (Mdhaas) was getting at in the beginning. Your feathers got a little ruffled and so you said a few things about how no one here must actually do deals. There are, in fact, many people on here doing numerous deals and making good income from them. If you’ve got all the REI knowledge you need, then you either don’t need this site or you could stick around for helping others…up to you. New blood and new experience is always nice to have here and there are a bunch of great people on here…just sayin’.

I appreciate your post Justin 0419 I evidently misunderstood the purpose of this site. I currently am in the process of filing the appropriate paperwork with the SEC to beable to advertise for private lenders, but am still lookin for additional lenders for larger deals, any suggestions? I heard Go Big was a joke. Your help would be appreciated .


Showcase I realize in life there will always be someone smarter, more educated, more experienced, wealthier and more knowledgable than me, I am but a little fish in a big pond of sharks and whales! I can admit when I am wrong, when I read something and answer without really understanding or when I just don't know the answer; as there are a lot of things I lack expertise in but commercial real estate, construction, development, management and finance is not one of them!

You act like every one on this forum is out to get you, you ask questions without really wanting the answers, the more you speak the less I think you know, I could be wrong but you continue to post things that just aren’t necessarily correct!

You can advertise for real estate secured investors all you want provided there money is secured by a deed of trust and not a securities IE: stock shares or LLC units alone! You can put together 5 or 10 investors as partners in accordance to percentage of investment provided thier investment is secured by a deed of trust and they are all general partners!

You can advertise for investors for a real estate deal as no legal entity is set up initially and the group determines the investment percentage and entity type which is directly (No Entity) or indirectly (Corporation or LLC) secured by real estate! This structure must fit Regulation D; Sections 504, 505 and 506 and investors must meet the sophistication standard if required for compliance!

What you can not do is advertise for investors for a legal entity that already exists and is seeking capital in exchange for stock or LLC percentage prior to determining to buy and invest in a specific property! This is a securities offer!!!

The SEC created Regulation D; Sections 504, 505 and 506 specifically for raising capital without registration for a Corporation or LLC. There are specific regulations and compliance issues to adhere to and must be met to insure legality!

You can not Tombstone Advertise for investors for securities at any time in the US with the exception of California Sec: 25102 for a SCOR offering of $1m or $5m dollars under Regulation D; 504 or 505!

The other legal way to create real estate capital is a REIT (Real Estate Investment Trust); which can be one of three types: A direct property ownership REIT, a Mortgage REIT, or a hybrid of both!

If your looking for lenders I have a comprehensive list of Hard Money Lenders! What state are you and your projects in?
Here at REIClub we are not lenders (Although there are a few) we are investors of various types, education levels and interests in real estate! We are mostly looking for participation by percentage of investment!

Showcase, deals are presented here as questions “how do I find investors for an apartment complex deal needing rehab?” and interest is expressed here by PM (Personal Message)! (Internal Email system directly if someone seeks more information.)

Now you summarily dismissed my earlier post:

And you responded with a fairly bad answer:

The nice thing about real estate is the ability to project specific financial equations, it is not only do-able; but can be done very precisely and accurately without seeing a thing, it is the same way developments are analysed in order to determine financial feasibility! We also know a brand new structure can not be built for less than $70 dollars a square foot or so, and arguable we could subjectly argue for a number a little smaller or much larger depending on what part of the country your in!

Mr. Showcase you absolutely need to know what this property is worth, but whether someone were to invest is another question as if your projects are in bad, declining area’s of the US where street gangs rule thier turf with violence and fear, no one would express interest in that situation, however cities evolving and changing, growing out of past problems and into becoming growth area’s, an exspanding population and a thriving, growing private enterprise base are interesting area’s for growth investment!

Now which one of these is really true?

“The current investor I have is dragging his feet due to it being in a c- to d+ area the complex still has an upside of aprox 15K per unit.”


“I have currently 4 private investors who have invested with me multiple times, and the reason they were dragging thier feet on this deal isn’t because they didn’t want to do it , it was because they didnt want to spread themselves to thin.”

You see one of the things about business is mis-statements tend to come back to haunt you for interpritation and clarification?

Now your rather proud of your credentials and shared them eagerly “I have been a home builder and house flipper for over 10 years”! I think that’s great my congradulations to you for achieving over ten years!

Now Mr. Showcase you have accused me of uneducated assumptions however you should fairly know with whom you speak.

I have been investing in real estate for 32 years and have a professional background in Construction Management and I am a third generation licensed contractor holding engineering and building contractor licenses in multiple states including California since 1991.

I am a second generation developer and currently manage multiple corporations doing business in development and tract home building, we manage a group of corporations holding and managing national / international assets in class A: apartment properties, flagged hotel properties and office / retail properties.

We manage a group of natural resource companies in precious metals and coal and operate companies supporting these natural resource endeavors! We are also involved in education, security services, construction management, publishing, and venture capital. If you include working (Apprenticing) for my families development and construction company as a teen I have 38 years in construction!

So next time you jump up and down and want to argue someone is uneducated and making assumptions be careful to wait just a moment and think about this experience because there are always others out there who know more than either of us and are probable smarter, wealthier and more knowledgable than we are!


I will admit in the whole scheme of things I’m really not even a drop of water in a whole ocean , and I would rather error on the side of caution than acting arrogant and really havn’t expressed myself the way I would have liked to , if I could start this post over again. I don’t claim to be any kind of authority when it comes to commercial investing , nor am I as accomplished as yourself gold river , and it seems to me that you have great deal more knowledge in commercial investing and I could learn a lot from you. But what I do have is a great deal of knowledge with numbers and the ability to determine not only weather a deal is profitable , but if it isn’t to find out why and by compiling all of my due diligents seeing what potential a property might or might not have,and you are right about knowing the value of a property not only in as is condition, but after repair value . It’s foolish to assume the value of a peticular property without running the numbers and using comps with all the variables factored in. Where I have my short coming is not determining weather or not a deal is worth it or not. But I could have as many deals as possible but without funding in place or possible investors lined up ready to pull the trigger all my efforts are futile. That’s why I have counseled a SEC atty to file my score form and a 504 reg D . In my state I am only allowed to use 10 private investors . But I was told I was not allowed to advertise or else I would receive a cease and decist letter. I not only wanted to work with accretided investors but nonaccretided, as well as raise unlimited funding. But I’m still at least 90 days from my filings being completed and was looking to develop relationships with other private lenders who were interested in working with me either on the quality of the deal or paying me a fair refferal fee to turn the deal over to them, and as a relationship is formed and I have developed a track record with this investor they would be ready willing to do some joint ventures together. It’s not finding the deal it’s finding enough investors to fund the deals I do find.

I would like to make this post to gold river . I looked back at the post you originally made to me and stated what you thought the value of this apartment complex was worth, why would you assume instantly that I was incorrect on my calculations as to possibly giving me some benefit of the doubt that even if I was off in my numbers that if it was even remotely close to what I was saying it was not to at least take a deeper look to see if I really had a keeper. Because didn’t you say that this is was what you do is buy and develop etc commercial properties, who knows maybe this might have been just what I said it was.


 You assumed I thought your numbers are wrong!

I can sell you my $300k Ferrari for $150k and I could sell that same Ferrari needing restoration for $50k, however what is the value of the Ferrari? Market value at $300k? The price you paid of $150k? Or the price prior to restoration of $50k?

All of the above answers are actually correct at some point in time, however as investors we seek the optimum value!

Your numbers were at the very least incomplete, however I never questioned like the example above your evaluation of value, I did however see you taking tens of thousands of dollars in cash flow that actually equates to value! Every $66k a year you take in cash flow equates to $1m in value at current interest rates!

A full rehab / remodel of the property actually returns closer to $11m in cash on cash returns over 3 years. This equates to a 27% return on investment year over year for the cash investment! Where I believe any way you cut it your repairs and the fact the property is 50% empty makes this a minimum 3 year investment to lease up and re-stabalize the property!

Your example actually shows very good returns at face value, an initial investment of $4.5m and potential returns of $5.5m over 3 years (These are gross number examples, not net after sales costs) according to your number examples. However from experience your current level of tenantcy will continue to reduce by attrition and it will take all of 3 years to re-rent up the current property.

I estimate the actual cash flow over three years at less than $1.5m because the complex will not effectively attract tenants, units will not show well and it will continue to be a struggle to rent / lease up units. This re-adjusts potential earnings in this property to a healthy $4m in returns over 3 years or a 29.6 percent return.

At face value this actually appears to be a better investment, however change orders, additional cost over runs, unexpected cost’s of dry rot, mold, termite, wiring, gas, water, sewer and structural items unknown at this time but estimated at more than $500k will ad money to your estimated $2.5m repair cost and you will face additional unknown costs in maintaining old components of an aged structure.

Appliances, HVAC, doors and door locks, flooring, electrical, plumbing and mechanical components will ad additional unknown cost’s to trying to rent / lease up an older complex! These additional cost’s could equate to $500k to $1m in additional unknown repairs every year. When re-adjustments are made returns drop to less than 15% per year cash on cash.

Now your asking how do you know this, well at one point or another I have owned apartment properties in some of the less desireable area’s of the country, I bought hundreds of units of apartment properties for $2000 to $5000 a unit, there rats nests and slums and yes the only way is up, but it takes money and time and experience has shown that it’s better with properties that have slipped this far in value to completely overhaul the property rather than try to nickle and dime it!

Any investor would agree there money is safer in a fully remodeled property plan than trying to manage an old property that has a number of unknowns, and reselling an old property whether fully leased up or not is an ongoing challenge!

You have a lot of grace as a residential investor, were not expected to know everything and we can make money as we continue to learn, but in commercial investing we are held to a higher level of sophistication, rather than deal in thousands of dollars we deal in millions of dollars!

As an investor I expect a full financial plan with a deal of this caliber and obviously want experienced people behind the deal with experience, a track record and bringing something to the table! I look for a construction estimate in unit pricing detailed and supported by cost data like RS Means and in an AIA format! I look for a critical path schedule supported by rental / lease statistics and detailed time / material lists!

When you appear to not know what your doing and don’t have a legitimate plan your investment is soon to fail, and investors don’t want to participate in open ended projects where there expected to fork over additional funds or have there ownership interests reduced for additional capital needs!

Remember just because it’s there does not make it a good investment!

Good luck,



We buy class A apartment properties, and occasionally buy class B properties that have been condo mapped and approved!

We do not buy Class B, C or D otherwise or currently rehab / remodel any existing apartment properties!

We build brand new class A properties and keep some percentage of these properties to add to our portfolio each year!

So your project does not appeal to me!


I thank you for your input G R and realize that not all investments are right for all investors . And many of the investments that you would turn away from, might just be the ticket for not only myself but many other investors as well. And I feel that the purpose of sites like reiclub should be not only to get questions answered or to answer them, but to also create new contacts and relationships with potential future business associates. I have found you can never have to many contacts. Who knows I might just find a deal your interested in and vise versa. The ones I’m looking for are B and C properties that are neglected and possibly bank owned with mid to low vacancy with an after repair cost around 10k to 14k per unit and a minimum size of 100 units preferably around 150 to 200 units located within a 200 mile radius of indianapolis In. And any populated city in the State of Florida. If anything like this comes up on your radar I would be interested.Thank You for your time.