Hi everybody, newbie here. Question and request for advice. I have a 4-plex I am looking to buy with FHA, with a partner providing the down payment. What might be some advice you would give to how to structure this deal? For example: just a simple interest loan to pay back the partner, or split some of the cash flow as well? And if we split the cash flow, would that be for the length of the loan? or for a set number of years? and if so how many? Also, this partner happens to be a real estate agent. Are there any ethical or legal things I need to be aware of? Any input or advice you have would be greatly appreciated!! Thanks in advance all!!
@Lauren Gomez I don't personally like the sound of this deal. You are using an FHA owner occupant loan, but you don't have the down payment. Technically you can get a gift for a down payment, but I am fairly certain you cannot get a loan. Now if you partner in some way with this realtor to buy the place, you are mixing your personal residence with business. What if things go south? You cannot just buy another property.
I also think there are some red flags from this whole setup, especially since the person lending to you is an agent. Are they also getting a commission on the deal? That would make me even more nervous. Whatever you do, do NOT put them on title. You also should consider if you should be doing a deal if you can't come up with 3.5%. I know the advice on BP is to "get in the game", but you really should have more capital if you buy a property so that you can safely service debt and take care of unexpected expenses along the way.