Structuring a Deal for PROFIT

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Join Ken as he answers your questions regarding real estate. This week's questions is about how to structure large deals with multiple investors..
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Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and most recently his book on entrepreneurship: The Sleeping Giant. Ken is a Rich Dad Advisor.
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If you are interested in this topic you can find more information out at the links below.
6 Steps to Structuring a Solid Real Estate Deal With Investors
www.biggerpockets.com › blog › 2014-11-18-6-steps-to-structurin...
Nov 18, 2014 - 6 Steps to Structuring an Investor Deal. Figure Out Your Goal for the Project. Create a Property Level Financial Model for the Deal. Create a Model Based on Your Proposed Deal Structure With Your Investor. Adjust Your Proposed Structure So That the Deal Would Make Sense for You to Do.
Understanding Real Estate Private Equity Structures ...
www.crowdstreet.com › investing › cash-flow-splits-true-promotes
Aug 23, 2017 - Understanding Real Estate Private Equity Structures: Cash Flow Splits vs. ... Waterfall structures in commercial real estate private equity deals can be complex. More (“GP”) co-investment relative to its limited partners (“LPs”) investments.
The 7 Most Commonly Used Fund Structures in Real Estate ...
thecommercialinvestor.com › real-estate-fund-structures
The 7 Most Commonly Used Fund Structures in Real Estate. May 25, 2017 by Salvatore M. Buscemi ... 6-12 month loans secured against rehab real estate deals. .... Episode 11: How to Raise Commercial Real Estate Capital [Part 1]. Too many ...
Financial Structures of Private Equity Investments | Blog
www.realtymogul.com › knowledge-center › article › financial-stru...
Syndicated real estate investment opportunities can be structured in many different ... have emerged some general patterns for real estate equity deal structures.

[@Sumitkumar-ig3hh]

Thank you ken, I am a beginner, but I am learning tons from your great mind opening videos.

[@erikam8860]

Thank you Kenny, for educating this rookie! 🙏🏻♥️

[@ginacardarella]

In my opinion I would never involve friends and family in case something goes wrong they never remember that you told them there's always risk etc and I just think it would be too hard on family gatherings and holidays 😬🙂

[@TechOutAdam]

Ken you’re the freaking best!

[@KenMcElroy]

Thanks for the kind words Adam! And thanks for watching and contributing.

[@anthonymcnair3096]

@@KenMcElroy hi How would you structure a deal using a stock as a asset?

[@DYLTHEVYL]

This is one reason why living in this internet age is so incredible. Only a guy who’s dad did this business, or a guy who was taken under the wing of his mom’s successful boyfriend, or folks who got to hob knob with the rich, would have access to this type of info.

[@vicentepelagio2666]

Thank you for your service 🙏

[@remodelassets6523]

Thanks so much Ken! The education you provide is greatly appreciated! I have a two family that had a variable rate @ 8% + - refinanced to 3.75% fixed a few years ago plus I pulled out 20K which was my original down payment. Infinite return. The payment is now lower than the variable. The property cash flows nicely.

[@Mr.RyanXXX]

Insightful this is a really good morning 🙏🌄😊

[@carlojaymanalo7374]

Hi ken! Which is better when it comes to investing in real estate? Build a corporation first where properties will be named after this corporation? Or start buying properties even without the corporation for protection?

[@lisayang6490]

Hi Ken, great information. How should I shop for mortgage company who is willing to give fixed rate on commercial properties? So far all the bank told me they only give 5 year arm with 20% down. Thank you

[@christopherbarker976]

Hi Ken as you say those questions were very good as the rates a as low we are looking at refinancing two of our units One is a holiday let and the other is a cottage on Kent Regards. Kit

[@KenMcElroy]

Thanks for watching and Christopher! It is good to keep focused on your investments, sounds like you are making good decisions.

[@MrMatt6699]

Excellent video!

[@KenMcElroy]

Thanks M4TT! Appreciate you watching and taking the time to comment!

[@brockdykxhoorn--2943]

Thanks Ken! That video helps a lot! Would the waterfall approach work for a long term rental? My brother and I are looking into a deal together for a 4 unit student rental. I will be fronting all of the capital for down payment and closing costs (no renovation needed). I like the idea of a preferred return to somewhat secure my return on investment however if we plan on holding this property for a long time would that return structure make sense? And would we split cash flow 50/50 along the way? Thanks again!

[@matthewlutzmann3268]

As far as splitting cashflow 50/50 -> is your brother managing the rental? If you’re fronting all of the costs, what skin does he have in the game to earn half of the profits? What value is he bringing to the deal that would earn that for himself? Just a few thoughts!

[@anthonyscreen6439]

Hi Ken, I have a question about the videos on KenMcElroy.com. Does the videos on KZbin you teach give the same lessons at KenMcElroy.com? Can you explain the difference between the two.

[@johngavriel613]

Hi Ken, is all your content based purely on the US market, or can it be applied to the European market as well?

[@Jeffsingleton100]

Do you have or recommend a book on private lending deal structures?

[@KirkiPooPoo]

Ha! Playbook to get docs:) just kidding. Although I had no debt with med school, the opportunity cost of time was enormous. Regret not learning about real estate sooner. Great content, keep it up!

[@enriquegonzalezortegariver4181]

In the case of your fixed rate loan (like 3.2%) for 40 years with the Bank, can it happen that down the road, lets say 15 years in the future the economy goes wild and the normal interest rates become "Jimmy Carter rates like 18%" can the Bank break the terms of his contract and force you to accept a much higher rate or they will foreclose the property and force you to repay whatever is owed at the rate they want? This happened in México in the 1990, the rates tripled (or got 8X higher) and they forced owners to accept new terms or else. All that was backed by the Government alluding national emergency scenarios.

[@jlmartinez7]

Sir you are a specialist in this field. This is awesome!

[@KenMcElroy]

Thanks for watching Luis! Glad you found the video useful.

[@juanosorno8153]

Hi Ken. Great video and the question you answered was exactly what I was looking for. I bought a 20 unit apt building for $1.7. It has been appraised at $2.7m. after 2 years of getting new tenants, fixing and painting. It is free and clear but I am thinking about a Refi. I was offered 75% LTV ($2m cash out), Non Recourse, 3.6%, 30 year amortization, Balloon at 12 years. I have never taken a loan. All my properties are free and clear ( I own 6). Question 1: Should I get the Refi or continue being Free and Clear. Question 2: The deal I was offered is a good deal?

[@brunomorales6113]

What means Balloon at 12 years?

[@jamesrey1125]

I think I just realized why your shirts say infinite; for infinite return?😄

[@sandippatel-ex4vd]

Hi Ken, How to start investing if we don't have Cash flow to get the Loan?

[@Re3iRtH]

6:50 Ken, I was with you until you called us doctors "unsophisticated" ! Haha, just playing my friend. But I'm looking to do radiology part time (4 months of the year) around age 37, and spend the rest of my time investing passively in private placements. I love the lifestyle it affords me so far :) Happy New Year!

[@KenMcElroy]

Hey Re3iRtH. Thanks for watching and sounds like you have a plan for your success.

[@yanickdjembact]

Hi Ken! This is Yanick Djemba from Cape Town South Africa. I’m planning on doing a 50/50 split. I want to structure the deal of for property at 2m. How can I benefit this deal cause it’s will be my first investment in Real Estate.

[@iscoreyustrip99]

I don't understand this; after paying the bank's $9million with the preferred return back in 3yrs, do you still own the property with the bank cos i think you've paid them back their money with the interest so why do will you still own the property with them? I don't really get this Ken

[@JA-vv8wy]

Could you do a video on how to become an accredited investor? I’m surprised that one can be a millionaire (depending on how you measure) & still not qualify to be an accredited investor. Am I missing something?

[@nextlife2230]

Millionaire not counting primary residence

[@nasir5644]

Sir plz enable subtitle under ur video

[@KenMcElroy]

Hi Nasir! Subtitles are enabled -just hit the CC button under the video. Thanks for watching!

[@joseguzman-fo4qp]

Can you tell me where can I send my question ? Email please

[@tomyshaw977]

I am currently looking at a six plex with a flat roof, it is like 40 by 70. How do you think I should negotiate the price, already have an offer accepted and the roof has water between membrane.

[@nickc7604]

4 Doctors disliked this video

[@benderthegreat4728]

new to the channel, very very helpfu informations no bsl..pls don't become a cardone type guy

[@erikam8860]

My goal for 2020 is to have you as a mentor!