Real estate investors can control deal terms by pooling private money through a single LLC that holds the first-lien position, letting multiple lenders invest without junior liens. A syndication model brings in 5 to 50 investors as members with ownership percentages tied to their capital contributions, commonly used with doctor groups.
Are you a land shark doing deals?
Two ladies that do, they work together. They have packages of loans that they need. This is what they're offering, which is a little bit funny in itself because I usually set the terms. Though if you're brand new, you don't, you don't have to let the customer set the terms, just FYI.
And to your point about like you set your own terms, so do you. You should always set your own terms. Never. Accept the terms of the people asking for money.
So basically what they're doing is they're pooling private money lenders together that will then have one LLC together or a joint venture together that will then hold the first position of, of lien. So they can, that's, that's how they can gather, you know, 5 or 10 different lenders all in one and still have the first lien. Otherwise it'd be first lien, second lien, third lien, fourth lien, and nobody wants to do that.
Oh, this looks a lot like how I do all of my syndications with my doctor's group. Stockholders typically don't want to buy assets that have any kind of liability because they don't want to, they don't want to mess with it. So they land bank. And what we do is we get, we get between 5 and 50 investors to come in. They all have a position in the company and they are on the LLC, LLC, and, or in most cases, it's an LP, limited partnership, LLP. And what we do is that LLP then goes out and owns the asset, but every one of them is a member to the LLP. And that means that they've invested some sort sort of money to get that position. And based on how much they invested is how much they own the percentage.
So this is saying that the loan to cost is at 48.5%, the loan to value on the after rehab value is going to be 27.1%. So 80% of the ARV is $960,000, which leaves roughly $635,000 of value above the stated PML loan. So that's a big protection cushion.
