Partnering with someone with good credit?

2 Replies

I have a decent income but lousy credit which will remain that way for years. I wanted to ask if partnering with someone just to get financing for 2-4 unit MFH homes is a thing or not. And if so, what a reasonable equity split might look like to essentially pay someone for their good credit and access to commercial financing?

Thanks for any guidance here

More info in case it helps

My goal, if no partner were involved, is to own 20 units and cash flow $4,000 per month. That's it. If my credit were better I would have just bought the first house, and then refinanced and bought the next as my cash on hand allowed. I plan to do the same with a partner due to the credit issue but am not sure how the numbers change.

@Sean D are you bringing any money to the deal? If you are bringing the downpayment and they are just holding the note the equity split would be less. If credit is the only issue I would work on finding someone with good credit willing to take a little risk. I don't know what a reasonable split is, but know if you create a win-win for each party you will be doing well.

If they are brining the downpayment and holding the note, it really then depends on what you are bringing to the table other than the deal.

@Chris Davidson yes I would put down the full down payment, the other party would just be there to be acquire commercial financing. Thanks for your insights!

Anyone want to be a bit bold and suggest a fair split? I lean towards 20% (loan signer) 80% me, but maybe I'm being way unfair to the other person and the value he or she is contributing!