I'm 26 and a new investor. This is my first day in the community.
I have found a good investment opportunity, but would like some advice on the best way to structure the deal. The property is an 11 bedroom 4-plex in the city I went to college I can guarantee to rent out for $4400 per month. Asking price is $397,000.
The problem is my wife and I just purchased our first home, so we have no money left for a downpayment.
I have a potential investor, but want to know the best way to structure the deal. He would basically be providing all the money for the downpayment. I brought the deal to the table, will do all the property management, and can guarantee the rent.
What's the best way to pitch this to the investor, insuring I get the most returns from the investment? Also should I open a LLC?
Thanks in advance and I look forward to the responses.
I suggest forming an LLC. some here will say you do not have to that Insurance will protect you, that's up to you. if you bring him in as a partner i would have an operation agreement drawn up by an attorney on whatever the two of you agree too. you may want to approach them as just being a lender at a certain percentage rate for the loan. If partnering, he is taking the main financial risk while you run it, start off negotiating with maybe a 60-40 split or something like that.
@Jon Petters , with your limited experience and a pretty expensive property, I would offer a 50-50 split. An LLC is probably a good idea but talk to a real estate attorney.
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