Tenant in Common

[Kevin Forsell]

Hello all, 

I am just getting started in the REI world. My goal is to work full time in REI, but currently do not have capital to invest. My best friend (let's call him Dan), however, mentioned that he has about $100,000 that he would like to invest passively in Real Estate. After some research, I discovered the Tenant in Common (TIC) strategy. I would like to pitch this as an idea to Dan, but I would like some input from seasoned vets.

My plan would be to use Dan's capital to purchase a home through TIC agreement. I would use an LLC so that after the final sale I can 1031 exchange to another property. Dan provides the capital, and I provide the sourcing of the property, the complete renovation, and property management in the event we decide to rent it out. Otherwise we would flip and sell. We would split the equity 60/40 in his favor.

I'm curious to learn from you all. What do you think of this plan? Is there anything you would warm me of, or suggest to change? 

Thanks, 

Kevin

[Basit Siddiqi]

I don't beleive you should take another person's money and invest if you don't have experience in the space. What happens if you lose all his money?

It also does not seem like you are clear in your strategy, you mention everything from 1031 exchange, flip and sell and potentially renting it out.