The Group is buying a cent house on a limited partnership, you are a Promoter, Broker...
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The Group is buying a cent house on a limited partnership, you are a Promoter, Broker Deal Maker and Partial Investori The property in a $400,000 apartment building having 6 units that you pay cash for with investors. The commission is 6% paid by the seller to you the Broker/Promotor and the organizational fee charged to your investor (buyee) is a 10% fee added to sale/acquisition price @Tadd 10%) for finding the deal, putting under contract, doing all the analysis, and finding all the investors, and managing the property for free. Your deal structure is simple: a) At the time of purchase, each investor invests in 10% of the deal. b) You also buy 10% of the deal. c) The property cash flows $43,000/year, net operating income after all expenses and vacancies. Say rents and NOI are flat for 10 years. d) As the manager/promoter, you get a 10% carried interest and charge no other fees except a resale commission of 3%. When the property sells for $600,000 in 10 years, how much do you personally make/benefit from the deal over time? How much total cash do you make as the broker, promoter, manager and resale broker over time? 1) Time Zero (Your Net Cash when buying) = $_ 2) Your Share of Cash Flow for 10 years based on 10% carried interest. = $ 3) Your Share of Residual cash flow for 10 years as owner at 10% = 4) Your Commission at Resale in 10 Years =$_ 5) Your Share of Net Proceeds at Resale of a $600,000 Commission = $ 10% of carried interest Net Resale Received s 10% of Balance Owner = S Total The Group is buying a cent house on a limited partnership, you are a Promoter, Broker Deal Maker and Partial Investori The property in a $400,000 apartment building having 6 units that you pay cash for with investors. The commission is 6% paid by the seller to you the Broker/Promotor and the organizational fee charged to your investor (buyee) is a 10% fee added to sale/acquisition price @Tadd 10%) for finding the deal, putting under contract, doing all the analysis, and finding all the investors, and managing the property for free. Your deal structure is simple: a) At the time of purchase, each investor invests in 10% of the deal. b) You also buy 10% of the deal. c) The property cash flows $43,000/year, net operating income after all expenses and vacancies. Say rents and NOI are flat for 10 years. d) As the manager/promoter, you get a 10% carried interest and charge no other fees except a resale commission of 3%. When the property sells for $600,000 in 10 years, how much do you personally make/benefit from the deal over time? How much total cash do you make as the broker, promoter, manager and resale broker over time? 1) Time Zero (Your Net Cash when buying) = $_ 2) Your Share of Cash Flow for 10 years based on 10% carried interest. = $ 3) Your Share of Residual cash flow for 10 years as owner at 10% = 4) Your Commission at Resale in 10 Years =$_ 5) Your Share of Net Proceeds at Resale of a $600,000 Commission = $ 10% of carried interest Net Resale Received s 10% of Balance Owner = S Total
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Commiss 10 Paid by selbit me Property 400000 organiz... View the full answer
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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