Hoping someone can drop a group I can contact that would be interested in a 65 - 75M equity check for a ground up. Understand that is a very general ask, but do not want to publicly post too many details about the project. It's a good deal that pencils for any equity partners that are in this space. Thank you.
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What market, what’s the Untrended YOC, hold period, and exit cap?
Texas, 6.5 - 6.7, 4 years, 4.75 - 4.85
How do you justify a sub 5% exit cap in todays interest rate environment?
I like your style, but you have an error somewhere in your model if you think that an untrended 6.5%-6.75% exists in multifamily today. Probably 100 bps off by my estimate.
If you've got a 6.5 yield on ground-up in a Texas market there are plenty of equity groups still writing checks.
Assuming your assumptions are realistic and we're talking Texas Triangle not El Paso or something
As a general rule, people will cut an equity check of any size if it's the right deal. I'll go door to door of every citizen in my state raising equity if you told me you had the literal deal of a lifetime. If the deal you're referring to has a 2 year hold period and 10x multiple then I'll find you that equity by midnight. But, if the deal is 7% IRR and 30 year hold then you might be waiting on that equity check for years.
On a real note, you're looking at institutional or quasi-institutional investors if you're looking for 1 person/group to write that check. But, you could go out an syndicate that among multiple family offices, "start ups", and more regional investors (maybe institutional too if you can find it). If you want any real help you'd need to give some details of the deal like your underwriting return metrics. You don't need to say what tax parcel your deal is on, but without knowing anything about it.
As someone below says, if this is true, you shouldn't have any problems. "A deal that pencils" can mean a lot of things, depending on how realistic the Sponsor is on their assumptions
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