My Partner gave me 25% on the Cashflow...Is This A Good Deal????
My Wife and I recently decided to become real estate investors. We've read books, watched podcast, attended seminars and even are in the process of closing on a long distance single family as I type this...
Admittedly, I wasn't 100% thrilled because I wanted to go into a long distance Multifamily property @ 3.5% down instead of a Single family but after looking at the numbers I was ok with *$400 a month cashflow + 26.6% CoC ROI on our first time ever at bat. I'd call it a single w/ an RBI.
We recently decided to partner with a friend who was interested in how we were going to become investors (They've thought about investing before but didn't know where to start). My Wife took the friend/partner on a trip to where we invest and found a 5 unit Multifamily property. $200,000 offer accepted.
To my understanding we talked about a 50/50 partnership. Things changed for unknown reasons, and now...our Partner wants to do a 75/25 Partnership instead because she's willing to put up 80% of the down payment = $20,000 and my wife and I to put up the remaining 20% = $5,000 - - we'd be all in for $25,000 total
I ran the numbers using the BP rental property calculator on the 5 Unit Multifamily, and Cashflow = $1,560/mo
Cashflow = $1,560
Partner = 75% of $1,560 = $1,170/mo
US = 25% of $1,560 = $390/mo
I understand that $5,000 for a 25% stake on a rural 5 unit Multifamily on 1acre of land isn't that bad. I guess I had my mind set on a 50/50 and but I am bringing a lot to the table here.
**** The Question is, If you brought someone to the table who has some money and they used many if not all of your resources to obtain the deal....would 25% on the properties cashflow be worth it to you ****
Sorry For the long winded post. The details were needed.