How much money do you want to make on your next deal?
And, using reasonable assumptions, how much will you need to bring to the closing table and at what purchase price?
Know the answer to the first question but not the second? Have no fear, a new syndication calculator is here!
Someone asked me yesterday the following question:
“If I want to make $4,000 a month on my next property, how much would I need to raise and what would be the purchase price?”
Well, my first thought is a billion dollar property should cut it. 🙂 But I didn’t think that would be an acceptable answer so REALLY the question is what’s the MINIMUM down payment and purchase price to reach $4,000 a month income.
After doing the math on the back of a junk mail envelope I started talking to my roommate, an Excel and financial wiz. We came up with this handy, dandy calculator.
Using reasonable assumptions like finding a 12% cash-on-cash return property, it tells you exactly what you’d need to buy and how much you need to have in order to create that desired cash flow.
Click the link below to download:
Oh, as far as the answer to the 4k a month question? It’s an $8MM property with cash investment of about $2.4MM using the assumption the deal is syndicated and there is an investor preferred return of 8% and profits are split 50/50 after that.
You can use this calculator if you are syndicating a deal OR if you are just using your own money. If using your own money then make the preferred return 0% and make the Manager cut 100%.
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.