Ideas for Structuring Deals with an Equity Partner for Buying and Holding Rental Properties...

[Dustin Faeth]

Hello BP Family,

I have been coming across a lot of great buy and hold opportunities in the Columbus, Ohio market that I would love to purchase and hang onto for some great monthly cash flow, and to build the rental portfolio...only problem is that I don't have the cash to purchase these properties at the moment, and I'm not able to qualify for any bank financing.

I have some contacts that I am considering approaching to see if they would be an equity partner and provide the cash to purchase these properties, while I would do all the sweat equity and locate the property, negotiate the buying price, get it rent ready (if it's not already), and then place a tenant and manage the property (or hire a PM company to do so most likely), for some type of equity split in the property. My initial thought is whatever split we decided upon (say 50/50) would mean that we would split the monthly rental profits 50/50.

I'm just looking for some input and ideas for the best way to structure a partnership like this, and how to best pitch this to a potential equity partner that will show them the value in partnering with me on deals like this.