Add a partner for equity in exchange for cash
hello BP,
For those who've owned rental property outright...here's a scenario:
Single family 3 BR currently rented for $1150 per month.
Purchased cash for $50k + $12k to fix it up. With settlement fees and insurance the total all-in cost is $70k.
Would like to tap into the $70k cash invested either through a lending institution (mortgage, line of credit, etc) or taking on a third partner (already owned by two individuals)
Under what terms would it make most sense to add another partner?
I was thinking a $40k buy-in, in exchange for equal (1/3) partnership. This is under the condition that we will cash out refi shortly after and the partner will immediately get back up to $20k of the initial $40k....so in essence we will end up equal owners with a mortgage on the investment property and the new partner only really is out of pocket $20k.
Is this way too off base or somewhat of a realistic scenario? Thanks!