Investing with Partners

[Collin Etherton]

My mentor at my 9-5 job and I found a great off market deal for a rental property. We have renters lined up, but I have questions about the logistics of the deal. We estimate the sale price to be $120,000. He wants to put $60k down himself, and I will hold my $10k and then use it to renovate the property before renting it out. The rental income will be $2034/month, and our estimated payment is $575/month. Since I am paying for materials, doing the labor, and managing the property, he proposed that I will receive a quarterly dividend check that will equate to 33% of the net income even though I am only providing 16.67% of the capital that he is providing. 

My questions are:

1. Is this a good way to dive into real estate, or would I be better off using my 10k to house hack something on my own? 

2. If this is a good deal for me, is there a better way to finance the deal? 

Thanks!

Collin

[River Sava]

Hi Collin- have you looked into DSCR loans?