When I bought my 12-unit apartment building (read the entire gut-wrenching discourse here), I put the entire deal together with a handful of investors. In fact, I ended up not putting any of my own money into the deal and got paid $15,000 at closing.

Let’s talk about how to pay yourself when doing deals, especially when you have other investors involved. When you’re putting together a deal to buy an apartment building with investors, you’re doing a lot of hard work: chances are, by the time you have a building under contract, you looked at many others.

You negotiated the deal and did the due diligence. You brought the investors together to raise the equity and you secured financing for the rest. And finally, you need to manage the property manager and eventually sell or re-finance the building to return your investors’ money. This is a lot of work, and you’re providing value for yourself and your investors.

Many people who go through the trouble of syndicating a deal don’t compensate themselves appropriately, when in fact it’s perfectly reasonable to do so. There are three ways you can pay yourself when syndicating an apartment building deal:

  1. Upfront at closing;
  2. While you own the asset; and
  3. When you dispose of the asset.

Listen to the entire podcast episode below or in iTunes to hear more about how you can pay yourself at the closing of your next apartment building deal.

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