JV Partner Question

[nubiwan]

So here is a deal I am looking at:

Property includes 2 land lots with an existing 5400 square foot building on one lot that I plan to transform into 3 town homes. My expertise is renovation, project management and RE sales and or leasing.

Current asking Price $300K
Renovation Investment $300K
Total Investment $600K

I would bring labour and materials valued at around $150K to the table. So looking for around $450k investment from JV partner.

Conservative Sales Figures:
Selling value of 3 individual townhomes is $250K x 3 or $750K (upside to perhaps $275-$300K)
There would also be an additional lot conservatively valued at $100k
Total sale value after renovation $850K - Profit of $250K

Looking for a 12 month partnership.

My questions:
Is this a decent enough deal to interest a private lender/JV Partner?
How would this deal be structured?
What interest rate and fees could I expect to pay?

Thanks for any help
Tony

 

[Thomas Beyer]

..

 

[Thomas Beyer]

If no mortgage the money partner should get 60-70% of profit . So, 600,000 ( ie 450+ 150 ) = 70% minus your 150,000 share so I'd say 50/50 is very sellable if you can show a track record.

So on a 250,000 profit the 450,000 investor would get 125,000 or 30% in a year which is sellable.

 

[nubiwan]

Thanks Thomas -
So if my overall profit at close is $250K then split 50/50? $125K a piece.
Thomas, can you comment on how attractive this might be to an investor to have that sort of money tied down for 12 months?
Are there otherr options for private lending, from my point of view? How might a mortgage be structured?
Thanks Again Tony

 

[Thomas Beyer]

Thanks Thomas -
So if my overall profit at close is $250K then split 50/50? $125K a piece.
Thomas, can you comment on how attractive this might be to an investor to have that sort of money tied down for 12 months?
Are there otherr options for private lending, from my point of view? How might a mortgage be structured?
Thanks Again Tony

IF 125/450 is done in a year i.e. around 30% it is VERY ATTRACTIVE .. the question is
a) is 12 month realistic
b) is 125,000 realistic
c) what is the track record of builder ?

As the 125K can shrink down to 80,000 and the timeline to 2 years or more and then not so attractive anymore !

I'd consider it, and secure it in first position as a mortgage. Send me some details please.

 

[nubiwan]

Thomas - I will put something together for you. Please give me a day or two. Can I PM you through this forum?