Hypothetical - Finance a block of flats

Hi All,

Looking at a hypothetical. We were whiteboarding a vendor finance structure for resi property when one of the antagonists suggested trying this at scale.
The question was, how do you do a no/low money down deal structure for a block of flats.

Scenario: Block of established flats. Not Strata titled.
Capitial City Location (Taking regional variables out of the mix)
8-9x flats with 2400pw (8-9 depending on final configuration)
Purchase $1.25M

Financials: Rough figures
$1.25M at 5.5%
PM fees of 8% on 2400pw
Rates - $5k pa.
Insurance $5k pa.
(Rates & Insurance where rough figures to plug into calculation)

Should be $700pw cash flow positive
This would be before depreciation and vacancy allowance.
Buy and hold strategy for minimum 5yrs

How would you find the equity? Especially as this would probably be commercial where 70-80LVR would be required.

Some of the ideas so far.
1. JV. Find an equity partner/s. But how to split the gains? Should one partner bring the equity & one the serviceability?
2. Vendor finance? $250k with a 2yrs repayment period. Would this be a bridge to far?
3. Finding finance for the $250k (JV, unsecured finance @ higher %) and use the $700pw to pay down P&I.
4. As per (3) but revalue in 2yrs to see if the $250k can be covered in equity gain.

Anyway seen or done this before? How is this handled at scale?
This was more of a "table of knowledge" discussion at the pub but might have some legs if you found a deal.

Cheers.
 
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